Soaring price of rice hurting Asia
HONG KONG: The soaring price of rice has triggered a supply and demand crunch that is hurting some of Asia’s neediest nations, forcing them to spend more on imports, industry experts and officials say.
For the likes of Thailand and Vietnam, the world’s two biggest exporters of the grain, the rising demand is a money-spinner with rice now selling at more than US$500 (K1,458) a tonne in Bangkok and nearly as much in Hanoi.
But from Bangladesh to the Philippines, from India to Indonesia, the squeeze is bad news as they seek to balance cost with the imperatives of feeding hungry populations and averting social chaos.
“Every Asian government is well aware of the close relationship between political stability and the stability of the rice price,” Jonathan Pincus, the UN development programme’s chief economist in Vietnam, told AFP.
“So every government in the region will be doing all it can to maintain price stability, particularly for basic food grains.”
At the end of February, Thailand’s benchmark rice was trading at more than US$500 a tonne, a rise of more than US$100 (K291.55) from a month earlier and up from just US$325 (K947.52) a year ago.
Exporters in Vietnam, meanwhile, were setting prices at US$460 (K1,341) a tonne last month, the state news agency VNA said – up more than 50% from a year ago.
“It’s a global issue. All cereal prices are going up,” Andrew Speedy, the UN Food and Agriculture Organisation’s Vietnam representative, said.
“This is quite serious. It’s hurting everybody, especially the poor.”
In the first two months of 2008, Vietnam’s rice exports brought in US$150 million (K437.32), an increase of 78% from a year ago.
Much of the output is destined for the Philippines, whose president Gloria Arroyo asked Vietnamese prime minister Nguyen Tan Dung last month to guarantee stable supplies.
Unable to meet its own needs, the Philippines will import up to two million tonnes of rice this year, according to the government.
Last year, its harvest was 6.44 million tonnes, national food authority spokesman Emmanuel Salonga said, but it needs 11.8 million a year.
“Our population is growing and arable land is being converted to other uses so we cannot cope with demand,” he said.
Indonesia’s rice production has been outpaced by its population growth for more than a decade, Mangara Tambunan from the country’s centre for economics and social studies, said.
“The government has to open the door to more imports. It should not be so reticent,” he said. Last year, Indonesia imported 1.5 million tonnes.
In Bangladesh, which has a population of 144 million, the price of rice has doubled in a year, vastly outpacing income levels, said Ruhul Amin, deputy head of the government’s food planning unit.
“People are cutting all their other spending to focus only on food,” Amin said, but with 40% of the population relying on a dollar a day or less, the poorest are struggling to survive. – AFP
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