Monday, May 12, 2008

Asian states feel rice pinch

Monday, May 12, 2008
The Fiji Times

ASIAN countries have been struggling to cope as the cost of rice has reached record levels.

The price of the staple crop has increased by as much as 70 per cent during the last year, according to the UN Food and Agriculture Organisation (FAO), with increases accelerating in past weeks.

Shortages have started to hit some importing countries.

Factors contributing to the price rise include:
  • Poor harvests resulting from extreme weather,
  • An increase in demand in some rice-importing countries, where populations and incomes are growing,
  • The expectation of further price increases –– resulting in hoarding,
  • Low stockpiles and a long term lack of agricultural investment.
The spike is also part of a general surge in food costs worldwide, so the option of switching to cheaper foods is often not available.

Rice producers including India, China and Vietnam have restricted exports as they try to protect their stocks and limit inflation.

Importers such as Bangladesh, the Philippines, and Afghanistan have been hit hard.

Prices are expected to remain volatile, though output is likely to grow later this year as farmers in Thailand and Vietnam plant additional crops.

Meanwhwile, the world’s biggest rice exporter plans to talk to Laos, Burma, Cambodia and Vietnam about co-operating on prices. Rice prices have tripled so far this year with countries such as India and Vietnam restricting their exports.

A Thai government spokesman confirmed that the cartel idea had been discussed in talks between the prime ministers of Thailand and Burma on Wednesday.

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