US rice futures fall 2.5%; Thailand to release 2.1m tonnes from stockpile
Business Times 30 Apr 08;
(BANGKOK) Runaway rice prices that have sparked panic buying, protests and worries about food security may have peaked and could ease in the weeks ahead as countries rush to boost output, the UN food agency said yesterday.
'High prices will be there but current prices are unreasonable,' He Changchui, the Food and Agriculture Organization's (FAO) assistant director-general and regional representative for Asia-Pacific, told Reuters.
While consumers would have to get used to higher prices for the Asian staple, the current market price has been distorted, he said. But with some countries expecting bumper crops and others boosting future production, the current shortage may ease, he added.
Yesterday, US rice futures fell more than 2.5 per cent, deepening a retreat from last week's record high as top exporter Thailand said it would release government stocks and traders looked ahead to Asian harvests.
The World Bank yesterday called on countries not to ban exports of food, saying that only worsens the problem.
'We are urging countries not to use export bans,' World Bank president Robert Zoellick said in a statement. 'These controls encourage hoarding, drive up prices and hurt the poorest people around the world who are struggling to feed themselves.'
'The next few weeks are critical for addressing the food crisis,' he said after a meeting of UN agency heads to tackle the food price crisis.
Mr Zoellick said he believed rice and corn prices would remain high, and wheat relatively high.
In a related development, UN Secretary-General Ban Ki-moon said he will chair a new UN task force to tackle the crisis provoked by soaring food prices.
The food crisis is an 'unprecedented challenge' that has 'multiple effects on the most vulnerable', Mr Ban told a press conference in the Swiss capital Bern yesterday. 'We must feed the hungry', and 'full funding' is needed, he said.
The task force will bring together the heads of UN specialised agencies, funds and programmes, the International Monetary Fund, the World Bank and the UN Secretariat, he said. Mr Ban was attending a two-day meeting with the key UN development agencies.
Rice is a political commodity in countries where the grain is a staple and any news of moderating prices would bring relief to governments as they grapple with the problems of surging prices, the prospect of further depleting state coffers to fund subsidies and the spectre of street protests.
Concern about soaring food costs and limited supplies have toppled Haiti's government and caused riots in parts of Africa.
In West Africa, more than 1,000 people marched through Senegal's capital Dakar at the weekend to protest against rising food prices. In Guinea, about 50 demonstrators marched peacefully in the capital Conakry on Monday.
In Thailand, the government's pledge to release the 2.1 million tonnes of stockpiled rice yesterday came a day after a trade official said the country's rice prices were likely to ease by about 20 per cent in coming weeks on increased supply from the new domestic crop.
'Don't worry, we'll have ample stock for domestic consumption as we will buy back as much as what we have sold,' Yanyong Puangrach, head of the Commerce Ministry's Department of Internal Trade, told reporters after the plan was approved.
But FAO's Mr He said a price moderation did not mean the days of cheap rice would return.
'We are hoping that it (increasing productivity) will ease the market situation. But we should not anticipate that consumers will get rice at those original levels,' Mr He said. -- Reuters, Bloomberg
