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HONG KONG: President Gloria Arroyo convened a food
summit with top
officials and farm experts on Friday, looking for ways to prevent
the emerging rice crisis from severely affecting the world’s
biggest importer of rice.
This came as the latest effort by
the Philippine government to ensure food supplies and control
soaring rice prices, which is also seen as a major task in other
Asian countries, where rice is consumed daily by every household.
Crisis beyond the Philippines
Part of a surge in global food
price, international rice prices have increased by about 20 percent
in the past three months and at least doubled since 2004, said a
recent statement by the UN Food and Agriculture Organization. There
are concerns prices could rise further in coming months.
Experts blame rising fuel and
fertilizer expenses, a shift of investment money into commodities as
well as crops curtailed by disaster, pests and climate change.
Some countries like the United
States were also blamed for diverting farm produce to make biofuels,
which had led to soaring global food prices.
About 20 percent of last year’s
13-billion bushel corn crop was consumed by ethanol production. That
percentage is expected to increase to 30 percent for the next crop
year ending August 31, 2009, Terry Francl, a senior economist for
the American Farm Bureau Federation, was quoted by the Associated
Press on Thursday.
The sharp rise of food prices is
hitting consumer pocketbooks and raising fears of a rice supply
shortage around Asia, spurring the governments to dig deeper to
stabilize domestic markets.
Things are so tight in the
Philippines that Agriculture Secretary Arthur Yap has asked people
not to throw away leftover rice and urged fast-food restaurants,
which normally give customers a cup of rice with meals, to offer a
half-cup option to cut waste.
Last week, President Arroyo
arranged the purchase of up to 1.5 million tons from Vietnam, at an
average price of $708.04 per ton, 49 percent above the price it had
paid in January.
She also has ordered a crackdown
on price manipulation, hoarding and profiteering on subsidized rice.
The Philippines is the most
pertinent example of the rice effect, but the risk could be repeated
in other parts of Asia.
Experts have warned that the
mounting food prices are hurting the region’s many poor, leading
to rising inflation and significant decline in the real incomes of
the poor.
Price hike continues
Rice prices have almost doubled
in just a year in Bangladesh, which suffered an annual food
inflation of 16 percent after massive floods in July and August, and
Cyclone Sidr in November, which devastated rice and other crops.
The Bangladeshi government
announced Monday it will import 400,000 tons of rice from India by
the end of May to sell below cost on the open market in a bid to
ease the rocketing price.
This purchase will boost the
total amount of subsidized rice available at government-run shops to
120,000 tons in April—nearly triple what had been on offer before,
Food Secretary Molla Wahiduzzaman said.
Government outlets sell rice at
25 taka (the currency in Bangladesh) a kilogram, around 40 percent
less than the market rate.
Rice price in the world’s two
leading rice producers, Thailand and Vietnam, are expected to surge
after India’s ban on exports of non-basmati rice.
Recently, India, which normally
exports 4 million tons annually, imposed a ban on non-basmati rice
exports to ensure the country has enough rice to feed its more than
1 billion people and to ease pressure on domestic prices, which have
pushed wholesale inflation to a 14-month high.
Traders said the ban might
trigger a scramble among rice importers struggling to secure
supplies and control prices.
Thailand’s Deputy Prime
Minister and Commerce Minister Mingkwan Saengsuwan has projected the
export prices of the Thai jasmine rice will double, reaching $968
per ton in the next quarter from the $484 per ton at the moment.
Some Thai officials and experts
have warned that the biggest rice exporter could face a domestic
rice shortage itself after skyrocketing prices on overseas markets
have encouraged traders to increase export volume.
However, the Thai government has
floated the suggestions to control rice export, saying the official
stockpile of 2.1 million tons is sufficient for domestic
consumption. “It is simply a matter of demand and supply that has
caused some shortage and rising prices during this period,” Thai
Prime Minister Samak Sundaravej said Friday.
Export restriction
Thailand seems to be the only one
talking about selling as a number of countries have imposed
restrictions to limit rice exports and keep more of their food at
home.
Vietnam, the world’s
second-biggest rice exporter, has halted new export deals for March
and April shipment. Last week, Prime Minister Nguyen Tan Dung said
Vietnam would cut rice exports by 22 percent this year as it fought
to rein in soaring inflation at home and secure food supplies.
Cambodia, which is experiencing a
rice surplus, also announced this week to ban rice exports for two
months.
The rice prices in the country
have risen sharply from about $0.40 a kilogram to highs of nearly
$1, sparking demands that the government put a cap on costs.
Cambodian Prime Minister Hun Sen
said the ban was a temporary measure to ensure food security,
blaming the price hike on “economic sabotage.”
Indonesia, which is another major
rice producer but needs to feed a large population, is cooking up a
regulation on banning rice export. According to the leading economic
daily Bisnis Indonesia, the government has been worried that
expanding price gap between domestic and global markets could
encourage local rice producers to heavily sell to export markets.
The Indonesian government
recently approved state-run logistic agency Bilog to import up to
1.5 million tons of rice to secure domestic supplies, even when the
agriculture officials reported a likely surplus of 2.3 million tons
this year in rice production.
The surplus was too small to turn
Indonesia to a major rice exporter, the officials argued.
Production seen to rise
One of the few good news was
Wednesday’s statement by the Rome-based Food and Agriculture
Organization, which said the world rice production was expected to
rise this year in all the major producing countries in Asia,
including China, India, Indonesia and Thailand.
Rice production will increase by
1.8 percent, or 12 million tons, assuming normal weather conditions,
easing a tight supply situation in key producing countries, the
agency said.
It also said the rocketing
international rice price may ease in the next few months, with new
rice harvests in Latin America and Asia.
Meanwhile, experts are calling
for reconsideration of biofuel from crops like corn.
“We should be very, very
careful about coming up with biofuel solutions that have major
impact on production of food grains and may have an implication for
overall food security,” Nobel Peace Prize winner and climate
change scientist Rajendra Pachauri told a news conference in
Brussels on March 26.
“As citizens of the world, we
ought to be concerned about the foolishness of growing food and
diverting it into fuel,” said Indian Finance Minister Chidambaram
on the same day in Singapore.
 --Xinhua
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