ADB Chief opposes rice cartel move
The chief of the Asian Development Bank (ADB) said on Saturday that
he opposed the idea of setting up an OPEC-style rice cartel as suggested
by Thailand amid surging food prices.
"Agricultural markets should be market oriented. It would not be good
for exporters and it certainly would not be good for importers," ADB
President Haruhiko Kuroda told reporters on the sidelines of the bank's
annual meeting, which began Saturday.
Thailand has said recently it had contacted Myanmar, Laos, Vietnam
and Cambodia, four members of the Association of Southeast Asian
Nations, on the proposal to form an OPEC-style rice cartel for a
stronger voice on international price-setting.
In the past month, rice prices have doubled, whose impacts have been
most pronounced in import-dependent countries. During the past year,
domestic rice prices doubled in Bangladesh and Cambodia, and rose 70
percent in Afghanistan, 55 percent in Sri Lanka and 40 percent in the
Philippines, according to the Manila-based ADB.
Kuroda said that to tackle rising food prices in the medium and long
term, the most important task is to increase agricultural productivity.
In a 15-page report, the ADB urged Governments to step up investment,
boost rural infrastructures and strengthen institutions to sustain
higher farm output. However, Kuroda played down the role of supply
shortages behind the current price hikes. "According to various
statistics, supply of most agricultural products has been increasing
steadily," Kuroda said.
Despite the recent surge in food prices, particularly rice prices,
"supply of rice in Asia is not short of covering demand," he added. But
Kuroda admitted that the rise in prices made people worry about future
supplies and rush to buy more rice than they usually do, which
contributed to an even worse situation.
On the role of speculative moves, Kuroda said there were conflicting
views among economists. Grain inventories have declined sharply in
recent years, a sign that speculators may not have been involved to a
large extent in the food price surge, he said.
Figures showed the current stocks of rice, wheat and corn were
estimated to have fallen by over 40 percent between 2002 and 2007. Food
prices dominated the agenda of the four-day ADB annual meeting.
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