Rice price overshadow Southeast Asian trade ministers meeting

Nusa Dua, Indonesia: Southeast Asian trade ministers met yesterday for talks on how to respond to soaring rice prices, after US President George W. Bush proposed $770 million in new US food aid to stave off a global food crisis.

The weekend gathering of the 10-member Association of Southeast Asian Nations (Asean) on the resort island of Bali also discussed efforts to build momentum for long-delayed world trade talks.

Asian rice prices have almost trebled this year and prices on the Chicago Board of Trade have risen more than 80 per cent.

At the Bali talks, which conclude on Sunday and were also involving representatives from Australia, New Zealand, India and the US, Malaysian trade minister Muhyiddin Yassin said he would press for the "hot topic" of food security to be higher on the agenda.

"It is about how Asean countries could cooperate to use their resources," he told reporters.

The world's biggest rice exporter, Thailand, is also at the Bali meeting of Asean economic ministers and an official from its delegation said the seller's perspective should also be heard.

"The cost for producers, such as fertiliser, is going up. Everything is going up," said the official.

With only 30 million tonnes traded annually, government export curbs, such as those from India and Vietnam, have spook-ed importers, such as the Philippines and Bangla-desh, at a time when global stocks have halved from a record high in 2001.

Media reports quoted Indian commerce minister, Kamal Nath, who is also due to attend the meeting, as saying rice exporters such as India, Thailand and Vietnam had a key role and would support Bangkok convening a "rice summit", without elaborating.

An Indian official in Bali confirmed New Delhi had floated the idea, but doubted it would be brought up at this meeting.

A Thai trade official, who declined to be named, sought to soothe concerns about a further rise in rice prices, reaffirming the country's policy not to curb rice exports.

"Thailand's policy remains the same. We don't have any problem over the supply of rice," he said.

Thailand should produce around 19 million tonnes of milled rice in 2008, with 7-8 million tonnes for local consumption and the rest for exports and stock, its agriculture ministry said.

Opec-style cartel

Thai Prime Minister Samak Sundaravej recently revived talk of an 'Opec -style' rice cartel in Southeast Asia involving producers Thailand, Vietnam, Myanmar, Laos and Cambodia. But analysts said yesterday the idea was unlikely to gain traction.

"I don't think it would work. All they can do is agree on a price, but they can't control the supply like oil," said Graham Catterwell, an economic analyst with 30 years of experience in Thailand and the region. "It's going nowhere."