Rice price at new record

Rice climbed to a record for a fourth day as the Philippines, the biggest importer, announced plans to buy 1 million tons and some of the world's largest exporters cut sales to ensure they can feed their own people.

Rice, the staple food for half the world, gained 2.4 percent to $21.50 per 100 pounds in Chicago, double the price a year ago. Philippine President Gloria Arroyo announced two rice tenders yesterday and pledged to crack down on hoarding. Anyone found guilty of "stealing rice from the people" will be jailed, she said.

"We're in for a tough time," Roland Jansen, chief executive officer of Pfaffikon, Switzerland-based Mother Earth Investments AG, said yesterday. Unless prices decline "you will have huge problems of daily nutrition for half the planet". Mother Earth holds about 4 percent of its $100 million funds in the grain.

A number of countries including Egypt, Vietnam and India, accounting for more than a third of global rice exports, curbed sales this year to protect domestic stockpiles. The World Bank in Washington says 33 nations from Mexico to Yemen may face "social unrest" after food and energy costs increased for six consecutive years.

The Philippines, which imports about 15 percent of its rice, is tightening controls over domestic sales and buying more overseas. The government's rice tenders are in April and May.

"I am leading the charge" against any officials and businessmen who divert supplies or distort the price of the staple food, Arroyo said in a televised speech yesterday.

"The need to avert social tensions from high food prices" has made "food sufficiency even more urgent", Abah Ofon, a soft-commodities analyst with Standard Chartered Plc, said in a report yesterday. Food importers may not be able to meet their needs because of the export limits, Dubai-based Ofon said.

Philippines imports

The Philippines may raise imports of milled rice by as much as 42 percent to 2.7 million tons this year from 1.9 million tons in 2007 to discourage speculation by local traders, Agriculture Secretary Arthur Yap said March 26.

Commodity prices are posting their seventh year of gains. The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials more than tripled in the past six years as global demand outpaced supplies of metals and crops.

Rising food prices are fueling global inflation. Wholesale costs in India rose 7 percent in the week ended March 22, the fastest pace in more than three years.

Soaring prices could lead to increased unrest, such as in Haiti recently, the United Nations said in a report yesterday.

Four people died in two days of rioting last week over food prices in Haiti, the western hemisphere's poorest country, the organization said on its website.

'Less food'

"What we see in Haiti is what we're seeing in many of our operations around the world - rising prices that mean less food for the hungry," the report said, citing the United Nations World Food Program's executive director Josette Sheeran.

Burkina Faso, Cameroon, Egypt, Indonesia, Ivory Coast, Mauritania, Mozambique and Senegal have also experienced unrest in the last several weeks related to food and fuel prices, according to the report.

"We are starting to see conflict and civil unrest," Francisco Blanch, who heads global commodities research in London at Merrill Lynch & Co, said yesterday. "Central banks will have to start taking measures to slow the inflation pain down."

The Philippine government had asked fast-food chains and restaurants to serve half portions of rice to cut waste, farm secretary Yap said on March 19.

Wheat traded in Chicago has more than tripled in three years, also threatening social stability. As many as seven people died from exhaustion or in fights while waiting in bread lines in Egypt, according to police reports. Italians boycotted pasta and bread last September and Pakistan sent troops to guard flour mills in January.

Standard Chartered yesterday increased its 2008 rice forecast by 12 percent to $18.50 per 100 pounds. Rice for May delivery was trading at $21.335 per 100 pounds on the Chicago Board of Trade as of 10:54 am in London.

Average ending stocks over the last three seasons are the lowest since the 1983-84 marketing year due to higher rice consumption, up around 40 percent over the last 20 years as a result of higher populations, said Ofon.

Agencies

(China Daily 04/09/2008 page17)