Carmel Crimmins and Rosemarie Francisco, PlanetArk 25 Feb 08;
MANILA - The Philippines' unusual plea for Hanoi to guarantee rice supplies is the clearest sign of a growing global anxiety over how nations will feed their people.
President Gloria Macapagal Arroyo had contacted Vietnamese Prime Minister Nguyen Tan Dung to see if he could pledge an undisclosed supply of rice, officials said on Thursday, an exceptional move in a market that normally operates on a purely commercial basis among traders or state procurement agencies.
It was not the first time an Asian government has taken action in the face of soaring grain prices and growing fears over the security of food supplies. India has restricted some rice exports, Indonesia has raised taxes on palm oil shipments and Malaysia is building up stocks.
But Arroyo appears to be the first to take an overtly political route to allay fears that the Philippines, whose rapidly expanding population is among the most dependent on imports, could run short of its staple national food.
"This is a wake-up call," Robert Zeigler, director general of the Philippines-based International Rice Research Institute (IRRI), told Reuters on Friday. "We have a crisis brewing in terms of rice supply."
Nearly half the planet's 6.6 billion people depend on rice to survive but rising populations and economic growth mean that the world is already eating more of the grain than is harvested. Vietnam, the world's second-biggest exporter, has put a temporary ban on shipments to meet domestic demand between harvests.
World stocks of the grain are currently around 72 million tonnes, their lowest levels since the early- to mid-1970s when food shortages triggered a devastating famine in Bangladesh.
Zeigler said other importing nations in sub-Saharan Africa and Asia could also be at risk and as soon as this year.
"When you have a president calling a prime minister asking them to guarantee rice supplies it's a possibility, that's for sure," said Zeigler.
Bangladesh is currently scrambling to secure supplies of rice after a devastating cyclone last year washed away about 1 million tonnes of the grain.
The rising price of food has triggered protests in Indonesia and Jakarta is having to hike its food subsidy bill by over a third to around 9 trillion rupiah this year, partly due to climbing prices.
China, a net exporter of corn, rice and wheat in 2007, has removed import taxes, raised export taxes and imposed export quotas on grains and flour due to red-hot inflation.
NO RELIEF IN SIGHT
Average rice prices have nearly doubled to around $393 per tonne in the past five years but yields are plateauing as rapid urbanisation shrinks available farmland and diverts water and labour away from production. Meanwhile soaring grains prices are also driving up competition for arable land.
Surging demand from the fast-growing Middle East and growing African consumption have boosted the price of rice from Thailand, the world's biggest exporter, by over 20 percent to their highest in a decade -- yet another inflationary headache for policymakers.
"There is no easy relief in sight," said Ted James, principal economist at the Asian Development Bank. "I don't think we will see them (prices) falling precipitously any time soon."
"But I don't think there will be a shortage if the price is allowed to reflect the market. If you try to keep prices below the market then shortages could emerge because of hoarding and speculation."
The IRRI, which spearheaded the development of high-yielding rice seeds in a Green Revolution around 40 years ago, says more research and development is needed to kickstart another Green Revolution that will help feed the world for decades to come.
Meanwhile the Philippines faces a sterner test than many other nations, as it has one of the fastest-growing populations in the world with three babies born every minute.
It is planting more high-yielding varieties of rice and is hoping to produce a record 17 million plus tonnes this year, but is constantly struggling to keep pace with demand.
"They have a challenge that is much greater than in other countries in terms of trying to be somewhere near self sufficiency. They have to keep running faster than other countries run," said Randy Barker, of the IRRI's social services division.
(Reporting by Carmel Crimmins and Rosemarie Francisco; Editing by Jonathan Leff and Sonya Hepinstall)
