Southeast Asian rice cartel plan "going nowhere"

By Darren Schuettler

BANGKOK (Reuters) - A proposed "OPEC-style" rice cartel in Southeast Asia will go nowhere due to the inability of governments to cooperate with each other and control output from their farmers, analysts and traders said on Friday.

Thai Prime Minister Samak Sundaravej, a TV chef whose main contact with rice is cooking it, has revived the long-dormant idea of a price-setting body involving producers Thailand, Vietnam, Myanmar, Laos and Cambodia.

The proposal, which threatens to add to global food supply fears amid record high rice prices, failed to gain traction seven years ago when it was first floated by Bangkok -- and most see little chance it will fare better this time around.

"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."

The five mainland Southeast Asian nations produce a combined 60 million tonnes of milled rice each year, about 14 percent of world output. But only Thailand, the world's number one rice exporter, and Vietnam have major surpluses, last year accounting for about 47 percent of world wheat trade.

"We are all rice producers. Why don't we cooperate in managing prices?" Samak said on Wednesday after talks with visiting Myanmar Prime Minister Thein Sein.

Samak said Thein Sein had agreed in principle to the idea, but the Burmese general did not speak to reporters. Myanmar has resumed limited rice exports this year, mainly to South Asia, after several years off the market, trade sources say.

The proposed group -- which includes two democracies, two Communist-led governments and a military dictatorship -- appears in no hurry to hammer out the details.