Sunday April 27, 2008

Thai rice price at new record high of US$1000 a tonne as Asian food crisis worsens

businesstimes.com.sg :

Prices of benchmark Thai rice leapt more than 5% to a record high of above US$1,000 a tonne yesterday [24 Apr 2008], and traders in the world's top exporter warned of further gains if buyers Iran and Indonesia step into the market. 'If Iran buys rice from Thailand, Thai 100 per cent B grade white rice would hit US$1,300 a tonne,' one exporter said. This year rice finally joined in a global rally in food crop prices amid a surge in demand from major importers who feared that export restrictions by key suppliers like Vietnam might leave them short, especially with global stocks having halved since touching a record high in 2001.

Prices have now nearly trebled since around US$383 in early January, sparking food riots in African countries and Haiti and adding to growing fears that millions of the world's poor may soon struggle to feed themselves. Malaysia was to urge Thailand to fill its orders for 480,000 tonnes of rice this year at the two nations' prime ministers' meeting yesterday. Malaysia, which imports 650,000-700,000 tonnes of rice a year to satisfy annual needs of more than two million tonnes, announced plans at the weekend to open up large-scale rice farming and boost irrigation to meet growing demand and cut imports.

- Benchmark rice prices continue to set records. Meanwhile, rice futures traded on the Chicago exchange have also been setting all-time record highs, and the Asian food crisis continues to worsen :

a. Rice jumps above $25 in Chicago for first time on tight supply

Rice prices in Chicago advanced above $25 per 100 pounds for the first time on speculation more countries may introduce export curbs, reducing supplies needed to combat shortages and cool inflation. Brazil may restrict exports of rice to build domestic inventories amid tightening international supplies. Rough rice for July delivery rose to $25.01 per 100 pounds in after-hours electronic trading on the Chicago Board of Trade.

b. Rice climbs to record as World Bank warns of Thai export risk

Rice advanced to a record as World Bank officials said they are concerned Thailand, the largest exporter, may restrict shipments, worsening a global food crisis. "If a key exporter like this limits foreign sales, it would be very much like Saudi Arabia reducing oil exports," said James Adams, vice president of the bank's East Asia and Pacific department.

In Cambodia, 13-year-old Pin Oudam gets a free breakfast of rice, fish and yellow split peas every morning at his school in Kampong Speu, the poorest province. Next week he won't. The World Food Program cut off rice deliveries to 1,344 Cambodian schools last month after prices doubled and suppliers defaulted on contracts. Schools will run out of food by May 1, depriving about 450,000 children of meals, the WFP estimates.

- The comments about the impact of Thai rice export restrictions being equivalent to Saudi Arabia reducing oil supplies echoes my own comments earlier. And the part of the Cambodia school-boy getting his food aid cut off is particularly poignant. The Asian food crisis is worsening and here's another snippet on the developing situation :

c. Rice shortage in Philippines - adults going hungry to let children eat

Myrna Lacdao used to eat two meals a day. Now she eats one and gives the rest to her two grandchildren. Lacdao, 53, shares a 70-square-foot shack in Manila's San Roque shantytown with her husband, two adult children and grandchildren. After the price of rice rose 41% in the past year, only the youngsters get three meals a day. Increasing global demand for food, speculation in commodities and rising fuel prices intersect in San Roque, where 8,000 families live in wooden huts with roofs made of scrap metal and plastic.

See also :

1. Global food crisis looms as Asia's rice bowl empties and world price soars
2. High food prices seen leading to strikes, protests in Asia
3. Rice price jumps to record high after doubling since 2007
4. Rice prices are steaming, with many implications
5. Soaring rice prices hurting Asia's neediest nations

(2008-04-27 13:37:42 SGT) [Biz] Permalink

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