Floods Leave Southeast Asia More Vulnerable to Food Price Shocks

Farmers in Indonesia sitting in front of processed rice that is ready to be sold. Economists say rice farmers living below the poverty line could be the most vulnerable to the impact of floods in Southeast Asia. (Photo: VOA - YN Yong)

Rice farmers in Cambodia tend to their crops. Some 12% of the country's paddy fields are believed to have been destroyed due to the flooding in Southeast Asia.(VOA - YN Yong)

October 31, 2011
Yong Yen Nie | Kuala Lumpur
Voice of America

Massive flooding in Thailand and elsewhere have destroyed large parcels of rice farmland, pushing rice prices up and leaving Southeast Asia at greater risk of a food price shock.

The rice-consuming region is under the threat of food supply shortages after heavy rains and massive flooding destroyed crops in Thailand, Cambodia, Vietnam and the Philippines.

The United Nations says it is closely monitoring the potential for “serious food shortages” in several parts of Southeast Asia after floods affected agricultural activities and aid deliveries.

Chan Sarun: Cambodian minister: Rice cartel aims for common price

Cambodian minister: Rice cartel aims for common price

PHNOM PENH, May 5 (Xinhua) -- An organization of rice exporting countries (OREC) including Thailand, Cambodia, Vietnam, Laos and Myanmar will aim to set common price for their rice exports for more benefits of their own and the world, national media said on Monday.

Common price of rice will enhance OREC's capability to rice production, provide chance for them to help settle the world food crisis and increase incomes for their farmers, Chinese-language newspaper the Commercial News quoted Cambodian Minister of Agriculture and Fisheries Chan Sarun as telling a rural products exhibition in southern province of Takeo on Sunday.

Prime Minister Hun Sen had repeatedly raised the concept of OREC and emphasized the above-mentioned benefits, just before Thailand made a similar initiative at the end of last month, he said.

In addition, he said, common price will help dissolve the chaos on the world's rice market and thus secure the uttermost benefits for all.

"It is high time to establish such an organization," he added.

OREC are now planning to meet as soon as possible to materialize the concept, according to earlier reports.

Meanwhile, the ASEAN (Association of Southeast Asia Nations) countries, including OREC themselves, agreed for cooperation to stabilize rice price during a meeting in Indonesia on Sunday.

However, on the same day, the Asia Development Bank officials in Spain clearly opposed establishment of OREC, citing that it contradicted the free spirit of market economy and would bring about disadvantages to both sellers and purchasers.

The rice exports of Cambodia, Thailand and Vietnam used to account for some 40 percent of the world's total annual export of rice. If Laos and Myanmar are also included, the percentage will rise over 50 percent.

Rice price has been spiraling since 2008 and high-quality rice currently sells some 1,000 U.S. dollars a ton.

Immigrants worried about cost stock up on rice

In this April 25, 2008 file photo, Frank Chu, manager of San Tung Chinese restaurant, scoops a bowl of rice for customers in San Francisco. Media reports of a shortage and skyrocketing prices are driving many immigrants and U.S. Asians, Hispanics, Indians and others to stock up on rice _ a once inexpensive staple that is reaching record-high prices across the country. (Photo: Jeff Chiu / AP)

A 50-pound bag where once 20 would do; experts say there is no shortage

Sun., May. 4, 2008
The Associated Press

RICHMOND, Calif. - Shoppers surveyed shelves loaded with rice at the Ranch 99 Asian supermarket, chatting in languages from Mandarin to Portuguese as they hunted for their favorite varieties, checked brand names and compared prices before heaving 50-pound bags into their carts.

Skyrocketing prices and media reports of a shortage are driving many immigrants and U.S. Asians, Hispanics, Indians and others to stock up on rice — a once inexpensive staple that is reaching record-high prices across the country. In Indian corner markets and warehouse-sized supermarkets specializing in Asian goods, customers who usually take home a 20-pound bag are taking two, or even reaching for the 50-pound bag.

"It's all in the news, on TV and newspapers," said Grace Yap, originally of China, who was shopping at Ranch 99 with Birgitta Elmahdy, born in Sweden.

"I'm from a place that eats a lot of potatoes, but I bought two bags," Elmahdy said. "Then I thought about it — that'll last me a year!"

Emphasizing that there is no rice shortage in the United States, economists and commodity traders blame the price hikes confronting U.S. consumers on everything from the weather in producing countries to the increased buying power of countries like China. Chief among those factors was the decision by India, Vietnam, China, Egypt, Cambodia and Brazil to curtail exports to protect prices at home, said Nathan Childs, an economist and rice expert with the Department of Agriculture.

Seeking to tame rising rice prices, which have more than tripled since January, Thailand proposed an OPEC-style cartel on Friday with major rice exporters Laos, Myanmar, Cambodia and Vietnam to give them more control over international rice prices.

Take escalating prices, add to that news of food riots abroad, and many American buyers are choosing to be safe and purchasing more, especially since rice keeps well. That sends ripples all the way up the buying chain, said Pat Daddow, owner of the California Rice Exchange, a platform where farmers sell to processors.

"You hear prices are going up, so instead of buying one bag, you buy five," he said. "Everyone is anticipating a price rise, so they're trying to buy ahead of it. That creates a short-term rise in demand, and higher prices."

But is it hoarding? Not really, since there's no shortage, said Daddow.

"It's just rational economic behavior," he said. "If gas were going up tomorrow, wouldn't you fill up your tank?"

The stockpiling has led U.S. warehouse retail chains to limit sales of bulk imported Thai jasmine, Indian basmati and long grain white rice — varieties not grown domestically. Sam's Club, a division of Wal-Mart Stores Inc., caters to small businesses such as restaurants, and limited shoppers to four 20-pound bags each.

Whatever experts call it, shoppers are choosing to buy a little more of whatever type of rice they prefer.

"I've had to double the order," said Kirk Tamachi, the Asian food buyer for Berkeley Bowl supermarket in Berkeley, Calif. "We normally sell two, three (50-pound) sacks a day of the different varieties we have, but we got wiped out."

Grocery stores in Flushing, Queens, home to one of New York's three bustling Chinatowns, also have seen a spike in rice sales along with prices

Helen Suen, Hing Long Supermarket's accountant, has produced invoices documenting the store's rising rice costs. At the beginning of the year, she bought jasmine rice through a wholesaler. Each 25-pound bag was $11, which the store sold for $13. Today, Hing Long pays $17 per bag and charges $20.

If the trend continues, Suen thinks it will eventually cause panic among her customers.

Kuo-Chen Yen, manager of New A & N Food Market Inc., hasn't had trouble getting rice, just keeping it on the store's shelves. It usually takes him two weeks to sell 10,000 bags of rice. Now it only takes a week.

Until rice prices flatten out, Yen said he is forced to pass the cost increase on to consumers.

"I'm just paying more to get the rice," he said.

Peter Wong, who's in charge of the rice at Hong Kong Super Market in Queens, said he's seen his sales increase by 40 percent. But he's not selling out. Like Yen and Suen, Wong had plenty of rice to go around.

Wong didn't think there was a risk that his customers would stop buying jasmine rice, even as it topped $19 for a 25-pound bag.

"The Chinese eat rice," he said with a smile. "They have no choice."

All types of rice grown in the United States have seen price increases as they fill in demand usually met by their competitors abroad. California farmers, for example, will be selling more to Turkey, now that Egypt, which also produces medium-grain rice, pulled out of the export market.

Long grain rice grown in the Southern U.S. went from $397 per ton in April 2007 to $794 a year later. The medium-grain rice grown in California went from $551 per ton to $750 per ton in the same period.

But it's the imported rices that don't grow in the U.S. — the basmati or jasmine preferred by Southeast Asians, Indians, Filipinos and many Chinese — that are in the greatest demand and going for the highest prices.

In early April, Thai jasmine was selling for $1,000 a ton, and basmati for $2,000 a ton. That translated into 50-pound bags selling for between $36 and $40, which led some buyers to take home all the rice their local stores carried and created spot shortages in certain immigrant neighborhoods.

"People are so worried, everything is going up so much. It's so crazy," said Mahinder Parmar, owner of Milan, a Berkeley store selling everything from Indian music to sweets, instruments and spices.

Walking over to a wall lined with bags of rice, many of them holding varieties grown only in India, he punches a bag of Surti Kolam. It's had been marked up from $12.99 to $21.99.

"People hear what's going on, they want to come and buy 2 bags, not one," he said. "We'll sell what's in stock, and after that we don't know."

Asian rice crisis starts to bite

Cambodia's government is selling stockpiled rice in a bid to halt soaring prices (Photo: AFP)

FRIDAY, MARCH 28, 2008
By Hannah Belcher
Al Jazeera

Cambodia has become the latest Asian country to impose restrictions on exports of rice – the staple food for half the world's population.

The government announced the two-month export ban to ensure "food security" on Thursday, blaming surging overseas demand – particularly in Africa and the Middle East - for the skyrocketing cost of rice.

Worldwide rising demand has seen rice stocks plummet to their lowest in about three decades, with average prices doubling over the last five years.

Earlier this month the UN secretary general warned that global food stocks had fallen to their lowest level in decades, driving prices up and threatening millions with starvation.

That is worrying governments – especially in the poorer Asian nations where a rise of even a few cents can for millions mean a difference between surviving or going hungry.

Earlier this month, the rising cost of rice brought protesters onto the streets of the Indonesian capital, Jakarta.

And recently the Philippines, the world's top importer of rice, asked Vietnam, the world's number two exporter, to guarantee supplies.

It was an unusual plea, and seen as a sign of growing anxiety among nations over how they will feed their people.

Already many rice farmers in the Philippines are being extra vigilant about their planting techniques, saying they cannot afford to loose a single grain come harvest.

The government is trying to play down the problem, but farmers say the country is facing a serious supply crisis.

"The population of the Philippines is growing, now its 87 to 90 million people," Jimmy Tadeo of the National Rice Farmers Council told Al Jazeera.

"But the use of land for rice is shrinking. The government has not prepared for this dilemma."

Like many countries in Asia, rice is the staple food in the Philippines.

Generous amounts are served in restaurants and cafeterias, but much goes to waste.

Now the Philippine agriculture ministry has told the restaurant owners to start dishing up smaller portions.

'Big burden'

Filipinos consume nearly 12 million tones of rice each year but the government's National Food Authority says it is finding it increasingly hard to source supplies.

This week the government signed a deal with Vietnam for a shipment of one and a half million tones.

"The price of rice may go up but we won't have a shortage, the supply will continue," said Gloria Arroyo, the Philippine President.

Certain rice varieties, she has promised, would to be kept affordable for poorer households.

But a growing number of consumers say prices are still too high.

"It's too much, it has added a big burden to our budget," one shopper in the capital, Manila, told Al Jazeera. "Rice is really expensive now"

The Philippine rice industry says the global crisis is just one part of the problem.

It is also blaming a slowdown in domestic production and corruption in the supply chain.

The government has blamed black-market traders for fuelling the rise and says it will clamp down on anyone who artificially jacks up prices.

"There are traders out there who are taking advantage of the situation," Arthur Yap, the Philippine agriculture secretary told Al Jazeera.

"So we have asked the national food authority to me more stringent."

Rice shortages have been politicised in the Philippines and could well be once again.

In an effort to fend off the crisis the Philippine government has unveiled plans to boost production by planting an additional 2.7 million acres during the coming rainy season.

Critics however say it's a damage control measure in a country where rice has always been a politically sensitive crop.

Thailand braces for rice crisis

Soaring exports may cause local shortage

Friday March 28, 2008
BANGKOK POST and AGENCIES

Thailand, the world's largest rice exporter, could face a shortage of rice after skyrocketing prices have encouraged traders to substantially increase their export volumes, Prasert Kosalwit, the director-general of the Rice Department, said yesterday.

Concerns over shortages could lead to the introduction of measures to control the amount of rice exported in the second half of this year if the price continues to increase. The measures have been floated by Deputy Commerce Minister Wiroon Techapaiboon.

Fears of a shortage come against a backdrop of signs of rice shortages in some countries, including the Philippines and neighbouring Cambodia.

The Cambodian government yesterday appealed for people to remain calm and not to stock up on food commodities after the government banned rice exports on Wednesday.

The Philippines rushed to sign a purchase agreement with Vietnam for 1.5 million tonnes of rice this year to alleviate an expected shortage in coming months. The agreement came one day after the government announced the country was facing a serious rice supply crisis.

India has banned the export of rice to other countries, while China and Vietnam have already reduced export volumes.

''A rice shortage in the local market is very likely,'' warned Mr Prasert.

His comment was supported by rice export volumes which were more than one million tonnes a month from October last year to February this year.

The stockpile under the supervision of the Commerce Ministry is 2.1 million tonnes. That could ease domestic rice shortages for about three months, said Mr Prasert.

In case the rice stocks are used up and the rice shortage gets worse, the Rice Department will encourage farmers to grow a mixed breed paddy with a high average yield per rai of 1,200kg. The growing period for the mixed breed paddy is only 110 days.

Rice Exporters Association president Chookiat Ophaswongse admitted that the rice price and global demand would rise further from the second quarter of this year.

This is because Iran and Indonesia, which are regular customers, have not yet placed their orders for this year, he said. The two countries are expected to do so in the middle of this year.

Iran is likely to order at least one million tonnes and Indonesia more than 1.5 million tonnes. This has prompted rice millers and farmers to hoard rice for future speculation as well, said Mr Chookiat.

But Mr Chookiat said he is confident the government rice stockpile of 2.1 million tonnes would be enough to prevent a rice shortage for three to four months until paddy from the new season is harvested.

He said the main shortage would come from the race to export rice to other countries.

Thailand could face problems only when it exports more than nine million tonnes a year, he said. Over the past five months, the country sold more than one million tonnes a month to other countries. If this export volume continues, a shortage is possible, he added.

Mr Chookiat supported measures to stamp out excessive exports, suggesting that the government prepare to put in place a minimum export price system, which has been in use in India.

''If the rising rice price continues, the measure may be needed in the second half of this year,'' he said.

Under the measure, the government requires exporters to sell rice at determined prices which are higher than the market price to slow exports.

Keat Chhon worries about rice shortage, Tao Seng Huor says no worry: Are they working for the same gov’t?

Friday, January 18, 2008
Everyday.com.kh
Translated from Khmer by Socheata

Keat Chhon, the minister of economy and finance, is concerned about rice shortage this year because the farmers are selling their rice to businessmen from neighboring countries for export. Speaking to reporters outside the National Assembly building on Wednesday, Keat Chhon said that farmers living along the borders with Thailand and Vietnam, sold their rice to businessmen from these two countries, rather than transporting them to Phnom Penh city for sale. Keat Chhon said that the large amount of rice sale to neighboring countries is a cause of concerns for him because of potential rice shortage this year. He said that it is regrettable that neighboring countries came to buy our rice and thereby causing the price increase this year. However, Tao Seng Huor, the deputy director of the council for rural development and agriculture, said that the government should not prevent farmers from exporting their rice because there is a surplus of 2.3 million tons of rice. Tao Seng Huor said that we shouldn’t worry about rice shortage.