Rice in Asia; shortages and sharp price rises expected

The Philippines: Price of rice could jump 60 per cent
A shortage in summer is expected to push up rice prices, forcing govt to import staple grain
Alastair McIndoe, Straits Times 27 Mar 08;

MANILA - PHILIPPINE farmers yesterday warned of soaring rice prices, a result of a shortage in supply that is taking place locally and worldwide.

The shrinking global stocks of the staple grain have also prompted the Philippine government to sign a deal with Vietnam to import more rice to boost the country's reserves.

The National Rice Farmers Council said a shortage in the lean July to September period could trigger a 60 per cent rise in the price of rice - the country's staple food - based on current average prices.

'The traders will definitely take advantage of the limited supply,' said Mr Jimmy Tadeo, the group's chairman.

The government has assured Filipinos that rice buffer stocks will hold out, but has acknowledged that rice prices are set to rise further.

As well as the tight global supply of rice and rising demand, upward pressure on prices is coming from higher oil and fertiliser costs.

Rice prices in Vietnam and Thailand, among the world's top exporters, have fetched up to US$500 (S$690) a metric tonne, a 25 per cent jump in the last month.

The Philippines consumes close to 12 million metric tonnes of rice a year. Most of it is grown domestically and production has been rising.

But wastage and the loss of rice lands have created a recurrent shortfall of around 10 to 15 per cent, which must be met by imports.

Vietnam yesterday agreed to supply the Philippines with 1.5 million metric tonnes of rice this year, a sizeable increase on an earlier commitment. The Philippines now plans to import up to 2.2 million metric tonnes this year, higher than earlier projections.

Not surprisingly, the scramble for imports has put rice self-sufficiency firmly on the front burner.

President Gloria Arroyo made this one of her economic goals when she came to power in 2001. But only one president, Mr Ferdinand Marcos, has succeeded, and then only briefly, in the late 1970s.

Dr Leocadio Sebastian, executive director of the Philippine Rice Research Institute, believes that coming close to self-sufficiency is possible, even within the term of the current administration, which ends in mid-2010.

'We have to increase production yields, which are below Vietnam and Indonesia, and invest more in irrigation systems, seeds and cropmanagement technologies,' he said.

One lawmaker has urged the administration to tap two cashed-up farm funds making up to S$760 million available this year.

Recovering post-harvest rice losses caused, among other things, by poor storage facilities could alone offset imports, according to the International Rice Research Institute.

Against the backdrop of rising prices, a steady supply of the subsidised rice sold by the National Food Authority (NFA), the state's rice-purchasing agency, will be crucial for Filipinos with low incomes.

The NFA spends millions of dollars a year buying rice at market prices and selling it more cheaply. Its rice costs 18.25 pesos (S$0.60) a kilogramme, a third less than some local and imported grains.

President Arroyo on Tuesday announced a crackdown on hoarders and profiteers buying subsidised NFA rice and then selling it at higher prices in public markets.

ADDITIONAL INFORMATION FROM ASSOCIATED PRESS

Indonesia: Govt mulls over plan to curb exports
Straits Times 27 Mar 08;

JAKARTA - INDONESIA is considering a policy to discourage rice exports and keep prices stable to secure enough supply of the staple grain for the country's 235 million people.

The plan emerged amid fears that an expanding price gap between domestic and global markets could encourage local rice producers to sell heavily to export markets, cutting domestic supplies.

Rice is priced between US$516 (S$710) and US$653 per tonne in local markets, lower than export prices of US$618-US$745 per tonne.

Indonesian farmers may harvest 61 million tonnes of unhusked rice this year, 5 per cent more than last year, because of favourable weather and increasing use of hybrid seeds.

'The condition is quite worrying, because domestic prices fell on higher output, while international prices are high,' said Agriculture Minister Anton Apriyantono.

'This may lead to overseas shipments.'

The government is balancing the needs of farmers to profit from rising prices and the supply of the grain that makes up an essential part of the diet for some 235 million people, with half of them living under US$2 a day.

Indonesia last year supplemented its local rice output with purchases from overseas to meet demand for the commodity.

Jakarta recently gave approval to state-run logistics agency Bilog to import up to 1.5 million tonnes of rice to secure domestic supplies.

BLOOMBERG, XINHUA

Thailand: Food aid to 140,000 refugees to be cut
Straits Times 27 Mar 08;

BANGKOK - SOARING rice prices on world markets and a battered US dollar are forcing cuts in already meagre food aid to more than 140,000 refugees who have fled Myanmar into Thailand, aid agency officials said yesterday.

'This rice price is just killing us,' said Mr Jack Dunford, head of a consortium providing food, shelter and other aid to ethnic minority refugees along the Thai-Myanmar border.

Most have fled from a brutal, decades-long campaign by the Myanmar military against Karen and other ethnic minority rebels.

They are housed in a string of camps along the frontier.

With a 50 per cent increase in rice prices in the past two months and sliding US dollar against the Thai baht, Mr Dunford, executive director of the Thailand Burma Border Consortium, said he would need to make up a budgetary shortfall of US$5.8 million (S$8 million) to keep up the already inadequate level of food rations.

Together with distributions of building supplies, soap and mosquito nets, those rations were cut earlier after a drop in donor funding.

If the gap is not filled, refugees could be issued with just 12kg of rice a month and no other food items - less than half their daily protein and calorie needs, he said. Nursery school feeding and health projects would have to be cut back or terminated.

ASSOCIATED PRESS

Cambodia: Hun Sen bans rice exports for 2 months
Straits Times 27 Mar 08;

PHNOM PENH - CAMBODIAN Prime Minister Hun Sen yesterday banned rice exports in a bid to halt spiralling prices, which have reached highs of nearly US$1 (S$1.39) a kilogramme, up from US$0.40.

'Cambodia will halt the export of rice for two months,' he said.

'It is a temporary measure...but it is to ensure food security.'

He also appealed to Cambodians to be calm over the increasing prices of goods, especially that of rice, and blamed soaring rice prices on dishonest merchants out to inflate their profits, the Mekong Times newspaper reported.

The PM ordered a probe of rice merchants in Kandal, Kompong Thom and Kompong Cham provinces and asked the authorities as well as rice stall owners to report any irregularities.

He also ordered the Ministry of Commerce to put all rice mills across the country into operation in a bid to ensure that consumers would have enough supply of local rice.

XINHUA, ASSOCIATED PRESS