UN extends breakfast program for Cambodian schools

By KER MUNTHIT

PHNOM PENH, Cambodia (AP) — Last minute funding to buy rice has allowed the U.N. World Food Program to resume free breakfast for hundreds of thousands of Cambodian children, the agency said Monday.

The program ended this month because of rising rice prices. But a $5.4 million infusion from WFP headquarters in Rome meant an extension through the end of the school year on July 5, said Paul Risley, a spokesman for the WFP in Bangkok.

Thomas Keusters, the WFP's program director for Cambodia, said he was "delighted" after receiving the news.

"We're going to deliver food to all 1,344 schools so that the school-feeding program can continue until the 5th of July," he said Monday.

Classes will resume in October and Keusters said the fate of the meal program "will very much depend on the donations we will receive in the coming weeks and months."

Facing a budget shortfall because of the rising cost of food, the U.N.'s food agency said three months ago that breakfast stocks at Cambodian schools would run out before mid-June. Five local suppliers defaulted on contracts to provide rice because they could get higher prices elsewhere, program officials said.

It was just one of many WFP programs facing cuts amid a $755 million shortfall in the U.N. agency's budget. But in recent days, the WFP received a $500 million donation from Saudi Arabia along with a total of $300 million from the United States, Australia and Europe.

Cambodian school officials, some of whom ended their program and others who were about to, expressed joy about the latest news.

"I am very happy if that is true," said Nheng Vorn, principal of Choumpou Proek school, about 40 miles west of the capital, Phnom Penh.

His school's rice supply ran out May 27, and the staff cooked the last 64 pounds of peas on Friday for the students.

About six miles from Nheng Vorn's school, the Sangkum Seksa school was set to end its meal program this week.

"But maybe there will be no need to close it if we will really get more rice," the school's principal Tan Sak said.

Asia's rice crisis easing

Amid expectations of a record harvest, prices decline. Cambodia lifted its export ban this week.

May 31, 2008
By David Montero
Correspondent of The Christian Science Monitor

PHNOM PENH, Cambodia - Asia's rice crisis, which has shaken governments and fomented social unrest, could be easing, as regional exporters announce bumper harvests and consider lifting export bans, developments that could inject badly need stocks back into world markets.

In an announcement that garnered praise around the region, Prime Minister Hun Sen said on Tuesday that Cambodia would lift an export ban imposed in March and sell 1.6 million metric tons of rice held in its stocks after determining that it had enough rice to meet the country's demand.

The move by Cambodia – the first exporting country to lift its ban – signals that, thanks to good weather forecasts, bountiful harvests are on the horizon, experts say.

"We expect this year to be a very good harvest," says Ny Lyheng, managing director of the Federation of Cambodian Rice Millers Association in Phnom Pehn, the capital. Cambodia is expecting to harvest 6.8 million metric tons, up from 6.7 million metric tons last year.

Rice, the staple diet of half the world's population, has increased in price by 76 percent in Asia and many other parts of the world since December, a result of shortage concerns and regional export bans. But experts have been counseling that, as long as harvests do well this year in Asia – where three-quarters of exportable rice is grown – the crisis will ease.

That seems to be happening. Authorities in Vietnam – the world's second-largest producer - say they expect to be able to export 4.3 million metric tons. As a result, an export ban imposed in March is likely to be lifted by July, according to Bloomberg.

And Pakistan, the world's fifth-largest exporter, announced on May 16th that it has enough rice to meet domestic demand and would sell 1 million metric tons overseas.

"The markets needed some positive signs, and this is one of them," says Duncan Macintosh, spokesman for the International Rice Research Institute in the Philippines, referring to Cambodia's announcement. "The harvest has just gotten under way and there's a lot of rice reaching markets in Asia."

The developments come days after the Food and Agricultural Organization of the United Nations (FAO) announced that, despite jitters over tight supplies, the world's output of milled rice would actually reach record levels this year, easing concerns of global shortages.

"World paddy production 2008 could grow by about 2.3 percent, reaching a new record level of 666 million tonnes, according to our preliminary forecasts," an FAO statement says, but warns that rice prices will remain high for now pending the harvesting of this year's rice crops.

The announcements have helped drive down prices of rice by 28 percent on the Chicago Board of Trade, the lowest in 10 weeks, Bloomberg News reported.

Rice prices have skyrocketed because of a confluence of global trends, including soaring gasoline prices (needed to produce and transport rice), and droughts in Australia and Vietnam, which have undercut stocks.

But they've also risen because exporters like Vietnam and Cambodia, seeking to ensure domestic supplies and bring down inflation, imposed strict bans on their exports at a time when those exports were needed most. That meant that less rice was available on global markets, which induced more panic, pushing prices up even further.

Not that all Asian suppliers have imposed bans: Thailand, the world's largest rice exporter, has continued selling rice, as has Pakistan, which never imposed a ban on rice exports because rice is not a staple in that country – wheat is.

Further driving up prices are the huge rice demands of the Philippines, the world's largest rice importer. The country, which is expecting a shortfall of rice supplies this year, has been struggling to fill tenders for up to 2.7 million tons of imports. Last week, Thailand pledged to offer the Philippines negotiable prices, while Japan agreed to sell it 200,000 tons.

Analysts warned that while the crisis may have eased for the moment, rice supplies remain a long-term challenge for the developing world.

Mr. Macintosh, in Japan to attend the Tokyo International Conference on African Development, said rice topped the list of many African leaders' concerns.

"While the crisis has eased, anyone who has any doubts that the problem remains just has to look at Africa ," he says. "It still imports about half its rice, and it has the fastest growing demand."

Cambodia becomes first rice exporter to lift curbs

05/26/2008
Reuters

PHNOM PENH, Cambodia -- Cambodia became the first rice exporter on Monday to lift a ban on foreign shipments imposed by some Asian countries in the last six months to protect domestic supplies in the face of soaring international prices.

Prime Minister Hun Sen said the southeast Asian nation, a small exporter compared to neighboring Thailand or Vietnam, clearly had enough rice for its own needs and was also short of its own long-term storage space.

"The ban on the rice exports is being lifted from now on," he told students in the capital, Phnom Penh. "We still have over one million tons of rice that need to be exported. We don't have any shortage."

Rice production in Cambodia is finally getting back on track after decades of civil war and upheaval.

It produced a record 6.4 million tons in its 2007-08 crop year, giving it a 2.6-million ton surplus for export, although Hun Sen imposed a two-month ban on foreign sales on March 27 to safeguard domestic supply.

At the time, he blamed surging overseas demand for a near trebling of domestic rice prices from $0.35 a kilogram in January to $0.92 kg in March.

The ban, which followed similar moves by India at the end of last year and Vietnam, was seen as another indicator of rapidly tightening supplies in Asia, pushing prices to record highs and raising concerns about the continent's ability to feed itself.

A week ago, state media in communist-run Vietnam, which vies with India for the mantle of the world's second-largest exporter after Thailand, said the government might lift its export ban in early July.

Hun Sen said Cambodia's next harvest was looking like a good one.

"It seems we have plenty of rice to come. We need more warehouses to store our rice," he said.

Cambodia lifts ban on rice exports

26 May 2008
AFP

PHNOM PENH - Cambodian Prime Minister Hun Sen today lifted a ban on rice exports to reduce global concerns over supplies of the grain, saying the country has enough rice for its own needs.

Hun Sen in late March banned rice exports in a bid to halt the staple food’s spiraling prices, which have doubled this year to record highs of nearly one dollar a kilogramme on the local market.

"The temporary ban on rice exported is lifted from today," Hun Sen said during a university student graduation ceremony in Phnom Penh.

"But the exports must go through the government system and will be limited to 1,6 million tonnes, so that we can maintain our reserves," he said.

Hun Sen said the lifting of the ban would help reduce "concerns of the world, especially the Philippines" over supplies of rice.

He also said exports would benefit farmers who harvested a surplus.

"We are not short on rice," Hun Sen said.

Cambodia produced some 6,7 million tones of rice last year with a surplus of 2,3 million tones which can be exported, he said.

The Philippines, which does not grow enough rice to meet its needs, scrambled to secure rice deals as world prices soared to record highs this year.

Experts blame the trend on higher energy and fertiliser costs, greater global demand, droughts, the loss of rice farmland to biofuel plantations, and price speculation.

Rice sector fears over rainy season rice hike

Tuesday, 20 May 2008
By Ly Menghour
The Mekong Times

As rainy season draws closer, the Cambodian Rice Millers’ Association (CRMA), the private sector and the Rural Development Bank of Cambodia (RDBC) fear there maybe an increase in the price of rice and paddy rice. The rice sector received US$10 million from the government in March to buy up rice and paddy to prevent price rises.

RDBC General Director Son Kunthor said that around 150,000 tons of rice has been bought with the US$10 million government funding.

“The stockpile of rice … is to prevent the price of rice from rising and to stabilize the Cambodian rice market, even though prices in the global rice market are rising,” he said. “As has been predicted, the world [will be] able to produce more rice, but the price of rice … is not lowering.”
To cope with possible rice shortages during the rainy season, around 10,000 tons of rice has been earmarked to supply the market in the near future.

“This is to prevent the price of local rice from rising and to prevent traders from taking advantage when farmers are transplanting rice in the upcoming rainy season,” said Son Kunthor.

He said Cambodia will not suffer food shortages as it has already stockpiled a lot of rice. He claimed that the price of rice is lower here than in neighboring countries.

The price of Cambodian rice is currently stable.

“Top grade rice, Phka Males, is selling for US$900 a ton. Lower quality rice, Banla Phdov, goes for US$560 a ton. These prices became stable in mid-March,” Keo Oeur, a Phnom Penh rice seller, said Monday.

In response to the substantial world rice price hike in mid-March, the government imposed a two month ban on rice exports and gave the private sector and CRMA the US$10 million to buy rice from farmers, as well as supplying subsidized rice to markets.

Cambodian gov't prepares stockpile of rice against rainy season

PHNOM PENH, May 20 (Xinhua) -- The Cambodian government has prepared enough stockpile of rice in case that the price of rice and paddy rice might increase during the just-started rainy season, English-Khmer language newspaper the Mekong Times said Tuesday.

The government has bought around 150,000 tons of rice for stockpile with the 10 million U.S. dollars earmarked in March, in order to fend off any negative influence from the rainy season and the fluctuation in the global rice market, Son Kunthor, general director of the Rural Development Bank of Cambodia (RDBC), was quoted as saying.

"The stockpile is to stabilize the Cambodian rice market, even though price in the global rice market is rising," he said.

Cambodia will not suffer from food shortage, he added.

Top rice now sells 900 U.S. dollars a ton, while rice of ordinary quality 560 U.S. dollars a ton.

In response to the substantial world rice price hike in mid-March, Cambodia imposed a two-month export ban of rice, supplied subsidized rice to the market and later allocated 10 million U.S. dollars to purchase rice for new stockpile.

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.

Rice Price Reaches Cambodian-Americans

By Nuch Sarita, VOA Khmer
Original report from Washington
06 May 2008

Rice prices on the world market have jumped 50 percent in the past three months and doubled since 2004. The high prices are hitting many families in Asia, but they have also reached Cambodian families in the US.

“Rice rose to a record $40 per 50 pounds in California, double the price a month ago,” said Bunna Seng, a grocery store owner in Long Beach.

Some countries in Asia have experienced rice shortages, and Cambodia has been forced to curb its exports. In more affluent countries, like the US, there is not a shortage, but families still feel the crunch. Some of them have begun stockpiling.

“The rapid price increase we have recently suffered is from record oil prices,” said Vanna, a Connecticut grocer. “Cambodian people bought between five and 10 50-pound sacks of rice to store in their house.”

Meanwhile, the actions of both consumers and rice sellers is affecting the cost.

“Hoarding by wholesalers and panic buying by consumers are factors of the soaring rice price,” said Marith Chhang, a consumer in the state of Washington.

The state of California is a huge rice producer in the US, but even here, the same factors affecting farmers in Asia are at work.

“There are many factors for the rise, including rising fuel and fertilizer costs, as well as climate change,” California farmer Thong Kim said.

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."

Mekong mafia

05/05/2008
Philippine Daily Inquirer

MANILA, Philippines - The announcement by Thai Prime Minister Samak Sundaravej, that Thailand has revived its idea of a rice cartel and was close to forming the Organization of Rice Exporting Countries with four other Mekong Delta neighbors, is deeply disturbing. It tells us that Thailand, a close ally of the Philippines and once a force for moderation in Southeast Asian geopolitics, has succumbed to greed.

Thailand is the world's biggest exporter of rice; Vietnam is the second-biggest. (China and India are bigger producers, by far, but most of their production is consumed domestically). Even without the participation of the three other countries invited to join Orec-Burma (Myanmar), Cambodia and Laos-a cartel that includes Thailand and Vietnam will be certain to dominate today's international rice trade. The three other nations are there merely to disguise the true nature of this price-fixing scheme.

Fortunately, Hanoi is cool to the idea-a logistical nightmare at the best of times, a cruel joke on the world's poor population at this time of peak rice prices. Even more fortunately, many Thais are against the idea. The Bangkok Post, in an editorial, rightly asks whether the "dream of setting prices much higher could bring Thailand a lot of criticism for starving poor people."

The president of Thailand's own Rice Exporters Association sought to put the brakes on Samak's brusque idea. "We view the idea as impractical. It is impossible to fix rice prices. Rice is definitely different from oil because it is a sensitive product. In addition, it couldn't be kept as long."

The cartel doesn't have to work, however; its very existence, during a worldwide rice crisis, will be enough to cause Thailand's reputation great damage.

But apparently, Samak's government has been shopping the idea even with producers like India. He himself has tried to gloss over the cartel-like nature of the proposed alliance, refusing comparisons to the Organization of Petroleum Exporting Countries. "We don't aspire to be like Opec, but we hope to be just a group of five to help each other in trading rice on the world market," he told reporters.

Could Thailand define "helping each other" as fixing rice prices downwards? That's possible, but a Thai initiative to lower prices (which have already doubled since last year) will get Samak's political party in trouble with its base of rural farmers.

Which brings us to the point. Thailand's Orec proposal is motivated not by national interest but by political greed. As the Times of India noted in a report: "The Thai move is evidently aimed at buttressing the fortunes of the ruling party, which depends on rural support, by hiking support price for farmers." In other words, it makes political capital out of the world's current, rice-related misery.

The Philippines, which hosts the International Rice Research Institute, where Thai rice farmers learned the science of higher rice productivity, should demand a stop to the Orec initiative. It is not enough that we ask Thailand and Vietnam to guarantee the continued flow of rice imports; we must force Thailand to reconsider its proposal, because it is against the very spirit of Asean solidarity.

At the same time, the Philippines must devote its energies to achieving rice sufficiency soonest. We may be the top rice importer in the world, but we are not laggards in rice productivity; in fact, we have been increasing production since 1998. We simply have too many mouths to feed, and not enough land to grow rice on. But Thailand's Orec provocation should clarify our options, like a date with an executioner.

From cartels to export curbs: gov'ts act on rice prices

A Filipino father feeds his child with steamed rice in Manila

HONG KONG (AFP) — As the price of rice soars, some governments -- notably in Asia -- are becoming wary of the political risk of millions of hungry people on their doorstep.

In response, governments are trying it out every technique possible to shield their populations, including introducing rationing, subsidies, price-fixing cartels and export curbs.

But there appears to be no magic one-size-fits-all formula, partly because of national factors and partly because of the nature of the market.

"In Asia, most rice import and export is carried out by countries rather than by companies," according to Jonathan Pincus, chief economist for the UN Development Programme in Vietnam.

"Producing countries are restricting exports because they're concerned about the domestic market," he told AFP. That in turn "means things just get tougher for consuming countries, which have to pay higher and higher prices."

Last week Thailand said it had agreed in principle to form a rice price-fixing cartel -- similar to the oil industry's OPEC -- with neighbours Cambodia, Laos and Myanmar as well as Vietnam.

Thailand, the world's top rice exporter which last year shipped around 9.5 million tonnes overseas, insists it has no plans to curb supplies.

It has said it will gradually sell off its 2.1 million tonnes of stockpiled rice at 20 percent below current prices to relieve shortages.

In contrast Vietnam, the world's second biggest rice exporter, has reduced this year's cap on exports from four million to 3.5 million tonnes to secure domestic supplies and reduce prices fuelling double-digit inflation.

Hanoi has also banned new export contracts until the end of June, although existing contracts -- including shipments to the Philippines at record prices of 1,200 dollars per tonne -- are being honoured.

Cambodia in late March banned rice exports to ease pressure on the domestic market after prices reached nearly a dollar a kilogramme, deepening poverty in a nation where one-third of the population lives on less than 50 cents a day.

But Prime Minister Hun Sen said last week that the government was mulling exporting rice again, to find markets -- and revenue -- for its farmers.

India has banned export of non-basmati rice and last month withdrew export incentives relating to premium basmati, although existing contracts are being honoured, notably to needy countries such as Bangladesh and Sierra Leone.

Brazil, which consumes virtually all of the 11 million tonnes it produces every year, did hint at an export ban but decided against it, preferring instead to urge producers to be cautious about supplies.

Even in the United States, worries about supplies have seen panic-buying in some stores, and two big chains, Costco and Sam's Club, took measures last week to ration sales due to price hikes and uncertain deliveries.

The UN's Pincus said the price of rice was more volatile than that of maize and wheat as much less of it is traded.

"Rice is mostly consumed in the countries where it's produced, and for that reason the world market is very thin. There are not a lot of buyers and not a lot of sellers," he said.

"So what happens is that if there are some buyers who find themselves short, the international prices spike, and that's what we're seeing right now."

Japan, which imports more than half its food, wants to raise the issue of spiralling food prices when it hosts the Group of Eight summit in July.

Still, it heavily protects its own rice industry -- the government strictly controls the production and price of rice and imposes high taxes on exports -- and instead of curbing shipments has been trying to step up exports.

In the Philippines, one of the world's biggest rice importers, President Gloria Arroyo has ordered steps to prevent hoarding and price gouging, and to ensure supplies.

The government sells subsidised rice in poor neighbourhoods and is crafting a new scheme of rationing.

There is no rationing in Indonesia except where the government operates a subsidy scheme for the poor, which allows 15.5 million registered families to purchase 10 to 20 kilogrammes of rice a month at a third of the normal price.

Indonesia has a de facto export ban, stipulating exports are only allowed when there is a domestic surplus of at least three million tonnes.

Bangladesh, which does not export rice due to its own needs, does not plan rationing, said the food ministry's senior information officer Golam Kibria.

However the government is selling subsidised rice to help low-income families as many poor have been forced to go without meals.

'Orec' initiative impractical

Friday May 02, 2008
PHUSADEE ARUNMAS
Bangkok Post

The idea of Thailand forming a rice price-fixing cartel with four other Mekong countries would be hard to implement, as rice is a politically sensitive commodity and production is relatively hard to control, according to rice exporters.

"We view the idea as impractical - it is impossible to fix rice prices," said Chookiat Ophaswongse, president of the Rice Exporters Association. "Rice is definitely different from oil because it is a sensitive product. In addition, it couldn't be kept as long."

Mr Chookiat said prices could not be set at will if any of the member countries failed to control output.

Encouraged by runaway prices of the grain in recent months, Prime Minister Samak Sundaravej on Wednesday revived the idea first floated by Bangkok in 2001 to set up a rice cartel comprising Thailand, Vietnam, Laos, Burma and Cambodia.

The group would be modelled on the oil cartel Opec, and would be called the Organisation of Rice Exporting Countries (Orec).

The idea was agreed on in principle by the five countries but has yet to take shape, according to Mr Samak.

Thailand first floated the idea out of fear of losing its market share because its export price at the time was $40 a tonne higher than those of Vietnam, India and Pakistan.

But Mr Chookiat said regional co-operation should instead be directed at improving productivity, reducing costs and strengthening logistics networks.

"Actually, Thailand has a strength in terms of know-how and can help its neighbours improve their production efficiencies and rice varieties. But we are not sure whether the other countries need our help."

According to Mr Chookiat, joint ventures in rice farming, particularly on a large scale, should also be promoted among investors in Thailand and the other countries.

Thailand is the world's largest rice exporter, shipping an estimated 9.5 million tonnes of rice overseas last year.

World rice prices have soared this year, blamed on higher energy and fertiliser costs, greater global demand, droughts, the loss of rice land to biofuel plantations, and price speculation.

International demand for Thai rice has soared after two other top exporters, Vietnam and India, imposed limits on exports to secure domestic supplies.

Statistics released yesterday showed that rice export volume from Thailand rose 36% in the first four months of the year.

Shipments totalled 4.1 million tonnes from January to April, compared with three million in the same period last year, said Apiradi Tantraporn, director general of the Foreign Trade Department. April exports were 814,218 tonnes, below the monthly average of 1.1 million tonnes in the first three months.

"Prices are close to a peak," Mrs Apiradi said. "Global demand for our rice is strong."

Thailand may supply 45% of the world's rice exports this year, compared with 31% last year, she said.

Mrs Apiradi also said the Thai government was unlikely to participate in the new rice tender by the Philippine government, as it had no policy to sell rice through the government channel.

The Philippines is seeking 675,000 tonnes of rice in a tender on May 5 after failing to attract a sufficient amount in previous auctions.

Mrs Apiradi said authorities would rather help lead the private sector to negotiate with buying countries.

She said several countries had contacted Thailand to buy rice, including Timor, Sri Lanka, Liberia and Nigeria.

Who's really benefitting from global food crisis: Cambodian farmers or middlemen?

Mr Sen said rain had fallen over most of the country and appealed to farmers to rush to grow a variety of food crops, including rice. (PHOTO: REUTERS)

Cambodian farmers to benefit from global food crisis: PM

April 30, 2008
AFP

PHNOM PENH - CAMBODIAN Prime Minister Hun Sen on Wednesday appealed to the country's farmers to start growing rice and other crops, saying most of the population would benefit from the global food crisis.

'The food crisis in the world, instead, offers an opportunity for Cambodian farmers although citizens complain about the soaring price of rice,' Hun Sen said during a ceremony some 50km north of Phnom Penh.

'But in return, some 80 per cent (of the population) who are farmers benefit from this. Now the opportunity for our Cambodian farmers has arrived,' he said.

Mr Sen said rain had fallen over most of the country and appealed to farmers to rush to grow a variety of food crops, including rice.

'Now the rainy season has started,' he said. 'Now the world has a big crisis, so please, our farmers start growing the crops, including rice, corn and beans. All the crops have a market now,' the premier said.

Mr Sen banned rice exports in late March in a bid to halt soaring prices for the staple food.

The price of the most commonly purchased grade of rice has hit US$0.90 (S$1.22) a kilogramme, up from US$0.50 to US$0.60 two months ago, deepening the poverty of the one-third of the population living on less than US$0.50 a day.

Mr Sen said on Wednesday, however, that the government was considering exporting rice to find markets for Cambodian farmers and to 'fulfil our international obligation in helping other countries...to reduce the difficulty in the world'.

'Cambodia is a small country, but it can help hundreds of thousands of families if we can export the rice,' Mr Sen said.

Officials have said that Cambodia has enough rice with more than two million tonnes stockpiled.

Mekong nations to form Opec-style rice cartel: Thai PM

April 30, 2008
AFP

BANGKOK - THAILAND'S prime minister said on Wednesday his country had agreed in principle to form a rice price-fixing cartel with Myanmar, Laos, Vietnam and Cambodia as costs of the staple grain rocket.

The grouping of Mekong nations would be similar to the oil cartel Opec, and would be called the Organisation of Rice Exporting Countries (Orec).

'I have talked with Myanmar and invited them to join the rice exporting countries cartel, which will include Vietnam, Laos and Cambodia, to fix the price,' Premier Samak Sundaravej told reporters.

He said Myanmar's Prime Minister General Thein Sein, in Thailand for an official visit, had agreed to join, even through the military-ruled nation was not currently a large rice exporter.

'Thailand will help them in terms of technical support to improve their production for export,' Mr Samak said.

Mr Samak said Vietnam, Laos and Cambodia had also agreed to join, and Thai Foreign Minister Noppadon Pattama said Orec should begin meeting soon.

Thailand is the world's largest rice exporter, and shipped an estimated 9.5 million tonnes of rice overseas last year.

World rice prices have soared this year, a trend blamed on higher energy and fertiliser costs, greater global demand, droughts, the loss of rice farmland to biofuel plantations, and price speculation.

International demand for Thai rice has soared after other top exporters Vietnam and India imposed limits on exports to ensure domestic supply.

Thailand has repeatedly insisted it will not limit exports, but on Tuesday the government announced it was releasing its stockpile of 2.1 million tonnes into the domestic market to keep prices stable.

The benchmark Thai variety, Pathumthani fragrant rice, was priced last Wednesday at 998 dollars (S$1,358) per tonne for export, up from 512 dollars a tonne in January this year, the Thai Rice Exporters Association said in a price survey.

Rice prices force WFP to halt Cambodian school breakfasts

A young student (L) passes a scavenger in Phnom Penh where price hikes have forced the UN to suspend a food programme

PHNOM PENH (AFP) — Soaring rice prices have forced the UN World Food Programme to indefinitely suspend a programme supplying free breakfasts to 450,000 poor Cambodian schoolchildren, an agency official said Tuesday.

"The cost of rice" was the main reason behind the move, Thomas Keusters, WFP country director in Cambodia, told AFP.

Keusters said the agency had suspended the popular programme since last week until mid-July when students go on holiday. The move affects 450,000 children in 1,343 schools countrywide.

He said the programme was suspended because the WFP could not afford to pay the current high prices for rice, which accounts for 76 percent of the school breakfasts.

Better quality rice now sells for more than 700 dollars per tonne in Cambodia compared with 300 to 400 dollars last year, according to sellers.

Keusters said some schools were using their own rice stocks to feed the children but they would also run out in less than a month.

He said the free breakfasts programme was important to attract children to school and being fed helped them pay attention in their lessons.

WFP introduced free school breakfasts in Cambodia about eight years ago but Keusters said he did not know when or whether the programme would restart.

Cambodia, where more than 30 percent of its 14 million population lives in poverty, is one of 12 "hunger hot spot" countries, according to the 2006 Global Hunger Index of the International Food Policy Research Institute.

Cambodia's inflation soared into double digits late last year, hovering around 11 percent, driving up the cost of food and other essentials.

Good-grade rice -- Cambodia's staple food -- now costs nearly 0.90 dollars per kilogram (41 cents per pound), deepening the poverty of the one-third of the population who live on less than 50 cents a day.

Aid agencies have warned that the growing food crisis could threaten tens of thousands of rural Cambodians with hunger in the coming year, as even food handouts have become significantly more expensive.

World grain prices have rocketed, a trend blamed variously on higher energy and fertiliser costs, greater global demand, droughts, the loss of farmland to biofuel plantations, industry and cities, and price speculation.

Free school breakfasts in Cambodia threatened by rising rice prices

Children waiting in line for their breakfast at the Sun Sun primary school in Pray Viev, Cambodia. (Thomas Fuller/International Herald Tribune)
But now, the World Food Program no longer has the cash to supply 450,000 Cambodian children with a daily meal of domestically grown rice supplemented by yellow split peas from the United States and tuna from Thailand. (Thomas Fuller/International Herald Tribune)

Monday, April 28, 2008
By Thomas Fuller The International Herald Tribune (Paris, France)

PRAY VIEV, Cambodia: The Sun Sun primary school, two low-slung ochre-yellow buildings and a wooden shack, is surrounded by many acres of rice paddies that recently yielded what farmers say is the best harvest in memory. But that has not shielded schoolchildren here from the effects of the global food crisis.

A countdown has begun among administrators at the school and at 1,343 other schools across Cambodia: in 30 days or less the schools' rice stocks will run out and a popular program of free breakfasts will be suspended indefinitely because of soaring food prices.

Short of cash, the World Food Program, the United Nations agency that feeds the world's poorest people, can no longer supply 450,000 Cambodian children with a daily meal of domestically grown rice supplemented by yellow split peas from the United States and tuna from Thailand.

In a country where a recurrent paucity of food has taught Cambodians to survive on a bare minimum of nutrition, children in this village are unlikely to starve. But some may miss out on an education.

"Most of the students come to school for the breakfast," said Taoch Champa, a 31-year-old teacher. "They also come to learn."

The suspension of the breakfast program illustrates one of the many ways that the global food crisis is hurting the world's poorest and most vulnerable people. Only destitute schools were selected to participate in the school feeding program: Pray Viev, in particular, is one of the poorest villages in what is Cambodia's most impoverished province, Kampong Spueu.

When the free breakfasts were introduced here eight years ago by the World Food Program, they were an instant hit.

"Students brought their brothers and sisters, 2, 3 and 4 years old," said Yim Soeurn, the principal at Sun Sun. "It was very hard to control."

The breakfasts have been a magnet for students ever since - as well as the teachers' best friend. Well-fed students are more attentive, tardiness is no longer a problem (breakfast is served at 6:30 a.m., before classes begin) and attendance by girls, who for years had been kept home by their parents, has increased sharply.

Outside his office, amid the high-pitched squeals of excited children pouring out of their classrooms for recess, Yim says he knows what will happen when the free food disappears: "Poor students will not come to school."

When the breakfast program was interrupted in January 2007 because of budget problems unrelated to high food prices, attendance fell by 10 percent, Yim said. Menh Veasal, a 14-year-old at the top of his class, skipped school to collect frogs and crabs from a nearby river - his contribution to meals with his parents and seven siblings. Sim Sreywat, a shy 12-year-old, was ordered by her mother to trek to nearby mountains where she harvested tamarind buds and bamboo shoots.

The imminent suspension of rice supplies is particularly paradoxical for the children who each day walk or ride their bicycles through miles of neatly delineated rice paddies on their way to school. Rice is plentiful in Cambodia, and the country has been a net exporter for the past decade. But it is becoming less and less affordable for the very people who grow it. In a 2006 survey, well before the spike in food prices, 22 percent of Cambodians in rural areas could not meet their own basic food needs.

The most productive agricultural land in Cambodia is near the borders with Thailand and Vietnam, and much of what is harvested in those places is exported at world-market prices.

But the soil in Kampong Spueu province is sandy and parched, yielding less than 1 ton per hectare, or 2.5 acres. That's half the national average, and local families typically have plots that are too small to feed their families. After the fall of the Khmer Rouge government in 1979, each family here was given one hectare of land, a parcel that diminishes in size as children divide their inheritances.

Thomas Keusters, the country director of the World Food Program in Cambodia, said he did not know when or whether the school feeding program would re-start.

"Not before the next school year - October 2008 - at best," he said.

Worldwide, the UN food agency has initiated an appeal for $500 million in additional funding to cover the increase in food prices. In Cambodia, the price of rice is now above $700 a ton, according to Phe Lamine, who is charged with food procurement in the Cambodian office of the World Food Program. This is more than double the $295 per ton that the agency budgeted for this year.

There was cash remaining for the school lunch program, but Keusters said he had diverted it to cover overruns in the most essential programs, including providing food for HIV and tuberculosis patients as well as pregnant and lactating mothers and infants.

The breakfast program seemed to be running smoothly in February when the World Food Program awarded contracts to five Cambodian millers for 5,780 tons of rice, all at less than $400 a ton. But when rice prices headed skyward in March, four millers defaulted on their contracts and the fifth delivered only a fraction of what was promised.

One miller, Von Bun Heng, sent an apologetic letter to Keusters, citing "force majeure" for the cancellation of the contract.

In a country where people get well over half their calories from rice, the higher prices are engendering tension.

A half-hour from the World Food Program offices, amid the crowded cacophony of the Cambodian capital, You Sareun, a shopkeeper, said his customers were angry.

"They say, 'If rice gets more expensive, people are going to die,' " You said. "They tell me in a joking way, but they are also serious."

Cambodian Kids Get No Free Breakfast as Rising Prices Cut Aid

Te Huoy, 65, who earns money collecting beer cans, plastic bottles and other recyclables, holds out the food she has left for the next two meals for herself and two grandchildren, in Phnom Penh, Cambodia, April 11, 2008. Photographer: Jason Gale/Bloomberg News

By Jason Gale

April 23 (Bloomberg) -- Thirteen-year-old Pin Oudam gets a free breakfast of rice, fish and yellow split peas every morning at his school in Kampong Speu, Cambodia's 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.

``Over time, this will result in higher malnutrition rates and lessen the physical and mental development of these children at a critical period in their lives,'' says Paul Risley, a Bangkok-based spokesman for the United Nations agency.

Record rice prices are forcing some relief agencies to cut rations. WFP, which helped feed 960,000 people in Cambodia in January, is limiting aid to only the neediest people in the country, including tuberculosis and AIDS patients, pregnant women and babies. Yesterday, the agency said its representatives in 78 other countries were facing similar choices.

That may leave Pim with an empty stomach. His grandmother, Nov Yim, estimates she will need 180 kilograms (400 pounds) of rice to feed a family of nine until the next harvest begins in September. A 50-kilo bag costs about 150,000 riel ($38) and may rise further, she says.

``At those prices, I can only afford half of what I will need,'' says Yim, 61. ``Without the extra rice, my children and grandchildren will go hungry.''

Suppliers Renege

The WFP was forced to end the Cambodian school program because suppliers didn't honor contracts to deliver 4,000 tons of rice at $390 to $450 a ton, says Thomas J. Keusters, the agency's representative in Cambodia. Other local dealers quoted prices of $620 a ton that were out of the agency's reach, he says. A year ago, the WFP paid about $260.

The program aims to keep kids in primary school and prevent them from being dragged into the workforce or prostitution.

About 69 percent of the children in Kampong Speu province, 50 kilometers (31 miles) west of Phnom Penh, leave school before completing the sixth grade.

Te Huoy, 65, doesn't want that to happen to the two grandchildren, ages 4 and 14, she's raising in a Phnom Penh slum.

Huoy earns 3,000 to 5,000 riel a day selling empty beer cans and other garbage from the streets of the capital and says it's barely enough to pay for rice, fish and sausages. She spends three-fourths of her income on food, up from half six months ago.

``I'm already old and will die soon,'' says Huoy, who never received an education. ``My hope is that my grandchildren can continue to go to school.''

Rising Budget

The WFP originally budgeted $3.4 billion to feed 73 million people worldwide this year. Last month, it appealed for an additional $500 million to cover higher food costs. That shortfall was revised to $756 million this week.

In Sri Lanka, two of the Rome-based aid agency's suppliers defaulted on contracts in the past 10 days, Risley says. In East Timor, where the government supplies rice to the WFP, authorities haven't been able to purchase the cereal from Vietnam because of a ban on exports from that country.

Other relief agencies are also feeling the pinch.

Net food aid flows have been declining for more than a decade, and subprime mortgage losses that led to 1.5 million home foreclosures in the U.S. last year may reduce cash donations, says Chris Conrad, a director of World Vision International's food programming group in Johannesburg.

Global food aid deliveries dropped to 6.7 million tons in 2006 from a high of 17.3 million tons in 1993, according to a 2007 report from the WFP.

``The pie is getting smaller,'' Conrad says. ``For years, everybody was saying the U.S. or other developed economies could feed the world. I don't think they can anymore.''

Exports Banned

In Cambodia, retail rice prices stabilized at about 1,800 riel a kilo, up from 1,300 riel normally, after the government banned exports last month, says Khiev Bory, a deputy director in the Ministry of Planning. Cambodia's farm ministry predicts a rice surplus of 1.48 million tons this year.

``Rice is available in Cambodia,'' Bory says. ``No problem.''

While there is enough food in some parts of the country, it's too expensive for most poor people, Conrad says. Grandmother Yim says she pays about 67 percent more for her rice than the price quoted by Bory.

Rice accounts for almost two-thirds of the calories consumed by Cambodia's 14 million people.

In 2005, Cambodians had a life expectancy of 58 years, the lowest in Asia, and more than a quarter of adults were illiterate, according to the UN's 2007-2008 Human Development Report. Some 37 percent of children under 5 were stunted because of poor nutrition and 7 percent suffered from malnutrition.

``We have the silent tragedy of children who are malnourished because they don't get enough food in their growing years,'' says Sharon Wilkinson, Geneva-based Care International's country director for Cambodia who oversees more than $8 million in aid projects. ``We are looking at a growing disaster.''

Asia’s rice crisis

Monday, April 21, 2008
By Brian McCartan
Asia Sentinel (Hong Kong)

The rising price of rice is part of a global trend in rising food costs, with wheat leading the way, up more than 180 percent on the year, soybeans up 82 percent, soybean meal up 67 percent. But it is rice, with its fundamental place on the plates of Asia’s consumers, that is worrying governments.

Philippine officials have been raiding rice warehouses near Manila where unscrupulous traders have been repackaging government-subsidized rice intended for poor areas and reselling it as high-grade commercial rice at twice the price.

Hopefully, rising prices will encourage governments all over the world to boost production.''

Even in wealthy Korea, consumers went into a near panic in early March when the cost of ramen, an instant noodle made from wheat that is a staple of the Korean diet, spiked in price. Housewives emptied grocery shelves for days to snap up supplies before the increase went into effect.

Higher fuel costs, with crude soaring above US$100 a barrel and threatening to stay that way, have partly been blamed for making fertilizer more expensive, raising the cost of growing rice as well as increasing transport costs. In Southeast Asia, disease, pests and a 45-day unprecedented cold snap from China down all the way to Vietnam in January and February that hurt harvests has also been blamed. Flooding in the Philippines and Vietnam has also contributed to the growing crisis.

Part of the problem, however, has been caused by ill-advised government programs. Economically disastrous subsidized biofuel programs intended to ease global warming in the United States and Europe have caused a precipitous decline in the amount of agricultural lands planted for other food sources such as wheat and soybeans. .

Low government rice stockpiles have also created an environment in which supply disruptions can result in rapid price swings. World rice stocks have shrunk from a peak of 130 million tonnes in 2000-2001 to 72 million tonnes in 2007-2008, according to US Department of Agriculture figures, the lowest level since 1983-84. That is estimated to meet only 17 percent of global consumption. Nearly half of the world's 6.6 billion people are dependent on rice and are already eating more than is harvested yearly.

In order to curb rising domestic prices, the governments of Vietnam, India and Cambodia have taken steps to lower rice exports. Vietnam reduced its rice exports by almost a quarter last week, ordering authorities to not sign any more rice export contracts and capping exports at 3.5 million tonnes for this year, down from 4.5 million in 2007. On the same day as Vietnam's announcement, India raised the minimum sale price of rice exports by more than 50 percent. The move effectively ended overseas rice sales except for only the highest grades of rice. Cambodia, suffering from spiraling costs, also announced a two-month ban on rice exports last week. Indonesia, traditionally a rice importing nation, is also reportedly considering a ban on exports to secure its domestic stocks.

Rising rice prices have governments worried about domestic supplies as farmers become increasingly interested in selling to the export market in order to make larger profits. Governments fear not having enough rice for local consumption and having to spend more on imports driving the price of rice up. Domestically it means that farmers are forced to sell at artificially low rates because they are denied export markets for their crop.

However, in an increasingly interconnected world where farmers and businessmen are well aware of international prices, they are much less willing to sell on the domestic market at prices that are often controlled by the government and are much lower than international rates. This has resulted in the kind of hoarding and speculation that Philippine authorities are trying to fight and that can subvert export bans.

The Indian government, while saying that there is no shortage in the country, is reportedly also concerned about domestic supplies amid fears of higher exports brought on by the scarcity on the global market. India was thought to possibly surpass Vietnam as the second largest rice exporter in the world this year.

In the Philippines, where there is not enough arable land to grow enough rice to feed its population, rice stocks are already low. Government officials have requested that the public save leftover rice and have even requested that fast food restaurants reduce the portion of rice sold with meals.

Thailand is trying to keep domestic prices down through government distribution from its own stocks. Bids from millers will be accepted only if they pack the rice in 5 kilogram bags for the domestic market. Thailand's government stockpile is estimated to be good for only three months, then it will have to buy on the local market to replenish stocks.

While this move may appease consumers, Thailand's rice producers are not happy with the government's current cap on domestic prices. The Thai Rice Packer's Association has demanded that the Ministry of Commerce increase the retail price of rice by 10 percent in April. The association claims the step is necessary due to increasing production costs.

The volatile rice prices have not been a boon to exporters. The common practice is for rice exporters to sell forward at fixed prices and then buy rice on the common market to meet orders. This has resulted in problems across the region as rapidly rising prices leave exporters losing money due to having to buy rice at prices that are much higher than what their export contracts were agreed for when signed several months ago. Exporters who insist on the previous price are finding it difficult to source enough rice to meet orders, forcing delays or even defaults on orders.

For Vietnamese exporters, the problem is compounded because their contracts were signed in dollars.

Thailand's exporters have the same trouble. Indonesia and Iran are expected to want orders for 1.5 million and 1 million tonnes of rice respectively filled in the next three to four months, but exporters are unsure of their ability to meet the demand. The default on international orders could cause up to $5 billion worth of damages.

Panic over rice prices hits home in capital: Fearing shortages, Asian market shoppers in south area buy up supplies

Sam Liew and his mother, Chan Phan, pass on buying Thai jasmine rice after checking out the price at Goldstar market in Sacramento. Paul Kitagaki Jr./pkitagaki@sacbee.com

Saturday, April 19, 2008
The Sacramento Bee (Sacramento, California, USA)

The global rice panic has come to south Sacramento.

As word of food riots and export shutdowns in Asia reached California in recent weeks, worried shoppers have been buying up hundreds of pounds of rice at a time from the Asian supermarkets that line Stockton Boulevard, looking for security against rising prices.

"When people saw the price jump $2 or $3, they started buying like crazy -- 10 bags, 15 bags," said Cu Van, a floor manager at Goldstar Supermarket. Each bag weighs 50 pounds.

In recent weeks, the retail price for a 50-pound sack of Thai jasmine rice, the prized variety served steamed in Chinese and Southeast Asian cuisine, has risen from roughly $20 to $40, straining budgets for families and restaurants.

The spike in the cost of Thai rice is one of the most extreme examples of a trend that is pushing up prices for all the major globally traded food commodities -- rice, wheat, corn, soy and dairy products. Experts say the increases largely have been driven by demand from booming Asian economies combined with poor harvests in key export countries like Australia. The demand for corn and soy to make ethanol and biodiesel also has boosted food prices, though economists disagree on how much.

Rice markets in particular have been jolted as a number of rice-exporting countries have restricted international sales in order to reduce prices for their own citizens.

State rice farmers thriving

For California rice farmers, though, the high rice prices are a boon. Even though the short- and medium-grain varieties grown here are sold into different markets than Thai jasmine rice, which has seen the steepest increases, spot-market prices for bulk California rice are up 50 percent since February, to about $20 for 100 pounds.

"We're kind of riding the coattails," said Pat Daddow, who runs the California Rice Exchange in Yuba City.

Domestic varieties of rice -- long-grain from Texas, for instance -- sell in some of the Stockton Boulevard markets for less than half the price of Thai jasmine rice. But grocers, shoppers and restaurateurs said the cheaper domestic long-grain varieties are suitable only for fried rice: Only Thai jasmine delivers the softness and aroma for proper steamed rice.

Still, Van said, some of her customers have begun to try other varieties. One morning last week,she pointed to a single bag of California medium-grain rice -- typically used for sushi -- lying askew on a pallet. It was all that was left of a one-ton shipment that arrived two days earlier.

But Paula Duong, manager at King Palace Seafood Restaurant on Stockton Boulevard, which goes through more than 300 pounds of dry rice a week, is still buying Thai rice. Her customers would notice any change, she said. She hasn't stockpiled, but is instead buying sacks as needed and hoping the cost will drop within a few months. She hasn't raised menu prices, citing the need to stay competitive.

Duong said that as soon as prices of Thai rice began to climb, she bought 10 sacks for her home. That 500-pound order will last her extended family of seven about eight months, she said.

"Every meal, there's rice," she said.

Importers in bidding wars

Nathan Childs, an expert on global rice markets with the U.S. Department of Agriculture, tied the jump in the price of Thai rice to a cascade of events touched off by attempts by several rice-growing nations to combat food inflation within their own borders.

Last fall India and Vietnam, both of which typically export several million tons of rice annually, announced they would be reducing rice exports in order to drive down domestic prices. China, Egypt and Cambodia followed suit, further restricting the amount of rice on the global market.

Rice-importing nations around the world then began scrambling to secure supplies, driving up the price for what rice remained available on global markets.

Thailand, the world's largest rice exporter, is reporting record harvests this year. But the increase in supply hasn't been nearly enough to offset global demand, Childs said, and the price of bulk Thai jasmine rice has nearly doubled since December.

With California rice prices at the highest levels since 1980, Sacramento Valley farmers are expanding planting this year -- but only by about 3 percent, according to USDA surveys. Rice needs certain clay soils, which limits expansion. In addition, the cost to grow it has been especially impacted by the high price of oil, so some farmers are choosing to switch some of their land to other crops.

"They can make as much, if not more, on wheat or corn," said Don Bransford, a prominent rice grower in Colusa.

Tight global supplies and the run on Thai rice in specialty supermarkets have forced U.S. importers into bidding wars to fill their orders, said Pete Lee, who owns Southern California-based Sun Lee Inc., a major rice distributor.

Lee said he sold nearly his entire inventory of Thai rice in the last two weeks -- but he worries that a big slowdown is in store for the summer.

"The panic just drained our stocks so quick," he said. "The thing is, everyone's buying future inventory. And if they buy everything now, we won't have anything to do two or three months from now."

Prices may have stabilized

Lee said he's guessing prices will stay at their current levels, or rise a bit, until at least the next Thai jasmine harvest, which begins in October. But there are too many variables in global rice trade to know for sure, he said.

"Whoever can predict that would be quite rich," he said.

Ronnie Duong (no relation to Paula Duong), who owns New Asia Supermarket on Stockton Boulevard, worries that high rice prices will eat into his profits. He makes the same margin on a sack of Thai rice whether it's priced at $20 or $40, he said -- but his customers have a limited food budget.

"If they spend so much on rice, they don't have money to spend on other items in my store," he said.

Van, the Goldstar Supermarket manager, said as far as she can tell, the peak of the local rice panic has passed. Prices have stabilized, at least for now, and those customers who do buy rice get only a bag or two. Plenty, she reckons, won't need to restock for quite some time.

"Everybody's home has so much rice already," she said.

"If we open the border to export rice to Vietnam, the rice price will increase": Expert warning

Hun Sen (L) and Vietnam's PM Nguyen Tan Dung (R). Hun Sen's lifting of rice export ban to Vietnam may increase the price of this staple again, and affect the the livelihood of Cambodian people.

Shift in Rice Policy Worries Experts

By Ros Sothea, VOA Khmer
Original report from Phnom Penh
10 April 2008

Economists and agricultural experts are worried that Cambodia will face rising rice prices once again, following government exceptions to an export ban.

The government put a rice export ban in place in late March following a price hike in milled rice, but it recently lifted the ban for certain farmers on the Vietnamese border.

Complaints over high prices have settled in the weeks since the ban, but economists warn the prices are likely to climb again, as neighboring countries experience a shortage of the staple.

The government meanwhile has injected $10 million in loans to rice exporters, but experts worry this won't be enough.

Hoping to prevent a crisis, the government recently provided $10 million in loans to rice milling groups and the government-owned Green Trade Company, to buy rice in the three provinces of Takeo, Prey Veng and Kandal.

Freelance economist Sok Sina told VOA Khmer that to buy rice from people was a good measure from the government to stabilize the rice price, but he warned the prices will increase again if the government runs out of money for subsidies.

"The rice will not come down. So what we are worried about is how much money the government has to make such subsidies, because it really needs a lot of money," Sok Sina said.

Sun Kunthu, president of Cambodia Rural Development Bank, which is under the government, said that the $10 million in loans will be paid back within six months, keeping the rice price steady.

The stimulus loans overlap with an April 7 directive from Prime Minister Hun Sen to allow farmers in Takeo, Prey Veng and Kandal to export rice to Vietnam, which is facing a shortage for export.

Ministry of Commerce officials said the measure was necessary, as farmers in those provinces were facing moisture in the rice due to recent rains.

An official from a rice milling association in Takeo said that since the government lifted the ban, between 20 and 30 boats came from Vietnam each day, carrying away 5 tons to 10 tons of rice per boat.

"If we open the border to export rice to Vietnam, the rice price will increase," he warned.