Business Standard

<b>Editorial:</b> Unworkable cartel

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Business Standard New Delhi

The idea has been floated again at a time when global rice prices are already on the boil, having more than tripled since 2006. Supplies are tight, owing partly to the restrictions on rice exports imposed by several countries, including India, Brazil and Egypt, all of which are keen to build up domestic stockpiles. Any adverse price signals at this stage are bound to add to food inflation. An indication of what could be in store came when the rice import tenders floated by the Philippines and Bangladesh failed to attract any worthwhile bid and had to be scrapped early this week. It is no wonder therefore that the first denouncement of the cartelisation move came from none other than a key Asean member, the Philippines, which is a large rice importer. The Asian Development Bank too has been quick to oppose it, maintaining that it would not be good for either exporters or importers.

 

Going beyond the immediate interests of rice-exporters and -importers, the truth is that a successful rice cartel is almost impossible to visualise. Even if the alliance partners agree on a price band, it will be difficult for them to control production/supply

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First Published: May 08 2008 | 12:00 AM IST

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