Government airs concern over Asian rice cartel

The government has expressed concern about attempts by some major Asian rice producers to form a rice cartel whose function will be similar to the powerful Organization of Petroleum Exporting Countries (OPEC).

"This is alarming. Any attempt to cartelize will be a concern especially for countries that import rice. Prices will not only rise but access will also be limited," said Agriculture Secretary Leonardo Montemayor.

Montemayor said this will be one of the discussions this week in the ASEAN Ministers of Agriculture and Forestry meeting in Vientiane, Laos.

There are talks circulating that major rice-exporting nations such as China, India, Pakistan, China, Thailand and Vietnam are keen on creating an Organization of Rice Exporting Countries (OREC). The OREC will function like the OPEC which dictates world oil prices.

Montemayor said that while some ASEAN members are expected to object to the proposal, it is unlikely the proposal will not take off just like previous attempts in recent years.

The ASEAN member-nations are meeting to discuss among others, the plan to raise the ASEAN Emergency Rice Reserves (AERR) from the current buffer stock of 87,000 metric tons (MT) to as much as 100,000 to 500,000 MT.

Earlier, National Food Authority Deputy Administrator Gregorio Tan Jr. said increasing the buffer stock to 500,000 MT will help members, especially those to be hardest hit with El Niño, deal with the hot weather disturbance that is expected to prevail until next year.

"The ASEAN wants to raise the volume of the buffer stocks so that member countries can draw from the reserve in time of crises or when domestic supply is inadequate," said Tan, adding that there have been instances in previous years when the Philippines availed of the AERR.

There was an earlier plan to hike the AERR to about 1.75 million MT but this is not feasible, according to Tan.

Montemayor said that members will come up with a resolution on her new volume for the AERR and have firmer details on how members can draw from the reserve, including prices and payment terms.