(Xinhua)
Updated: 2008-05-08 20:57

BEIJING  -- Thailand's Foreign Minister Noppadon Pattama said Tuesday that the kingdom is dropping its previous plans to create a cartel with other rice-exporting countries in Southeast Asia, citing concerns over food security.

"If Thailand sets up a rice cartel and fixes a price, that will worsen food security," Noppadon told press.

The statement signaled the about-face on the cartel after Prime Minister Samak Sundaravej said last week that Thailand had agreed in principle to form an OPEC-like cartel with Mekong nations of Vietnam, Cambodia, Myanmar and Laos.

The five nations produce a combined 600 million tons of rice each year, about 14 percent of the world output.

The proposal, staunchly backed by Cambodia and met with positive responses from other three countries, came under fire of rice-importing countries such as the Philippines which claimed that the formation of an oligopoly may deprive a large number of people of their rights to reach for staple food.

IDEA OF RICE CARTEL REVIVED

Thailand first floated the idea of rice cartel in 2001 to stave off a shrink in market share caused by higher export price. Samak revived the long-dormant rice cartel talk to give rice producers greater control over prices which has tripled since January this year.

The proposal was welcomed by Cambodia, whose government spokesman said the formation of such an association would facilitate the exchange of information and help fend off a price war.

The rice cartel, tentatively named Organization of Rice Exporting Countries (OREC), is aimed to ensure food stability and address food shortages in the region and the world, Cambodia Prime Minister Hun Sen said Monday.

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