Cambodia will join a rice cartel of five Asean nations that would collectively set rice export prices and take advantage of rising worldwide food costs, government officials said Thursday.
Thailand Prime Minister Samak Sundaravej told reporters Wednesday that Cambodia, Laos, Burma, Thailand and Vietnam need to band together and use their combined influence to exert more control over global rice prices.
Thailand and Vietnam alone control more than 40 percent of world rice exports, according to the UN Food and Agriculture Organization.
Thon Virak, deputy director-general of the international trade directorate at the Commerce Ministry, said that negotiations have not been scheduled so far between the countries but that all five have tentatively agreed to join the cartel.
He added that the cartel could be expanded to include more Asean countries.
The government is preparing to conduct research on international rice prices and the possible functioning of the cartel.
Thon Virak said he did not know when the cartel might begin operations.
Hang Chuon Naron, deputy secretary-general of the Finance Ministry, said the rice cartel idea was not new.
Prime Minister Hun Sen had brought up the idea publicly last year, he said.
Because of the different varieties and qualities of rice available within the five countries, the price would not be set at one rate, but the overall objective would be to secure good prices.
The cartel would share market information and give each other assistance in producing rice, Hang Chuon Naron said, noting that stabilizing rice prices will add more security to the Cambodian agriculture sector and spawn more investment and growth.
“It will have no negative effect on Cambodian farmers,” said Agriculture Minister Chan Sarun, who referred recently to Cambodian rice as the country’s “white gold.”
Economic Institute of Cambodia President Sok Hach said the cartel will raise Cambodia’s profile as an exporter, opening up its rice to more markets.
Sok Hach compared the rice cartel to the Organization of Petroleum Exporting Countries, which exerts major influence on the world oil market.
“It’s a great idea,” he said.