Hmm! Sounds like it’s all CTG’s fault!
Shah Haq
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Sent: Saturday, March 29, 2008 10:13 AM
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Subject: [ALOCHONA] High Rice Cost Creating Fears of
High Rice Cost Creating Fears of Asia Unrest
New York Times
The price of rice, a staple in the diets of nearly half the world’s population, has almost doubled on international markets in the last three months. That has pinched the budgets of millions of poor Asians and raised fears of civil unrest.
Shortages and high prices for all kinds of food have caused tensions and even violence around the world in recent months. Since January, thousands of troops have been deployed in
Food riots have erupted in recent months in
This has fed the insecurity of rice-importing nations, already increasingly desperate to secure supplies. On Tuesday, President Gloria Macapagal Arroyo of the
The increase in rice prices internationally promised to put more pressure on prices in the
But the
The same day,
Governments across Asia and in many rice-consuming countries in
“There is definitely the potential for unrest, particularly as the people most affected are the urban poor and they’re concentrated, so it’s easier for them to organize than it would be for farmers, for example, to organize to protest lower prices,” said Nicholas W. Minot, a senior research fellow at the International Food Policy Research Institute in Washington.
Several factors are contributing to the steep rice in prices. Rising affluence in
In
Until the last few years, the potential for rapid price swings was damped by the tendency of many governments to hold very large rice stockpiles to ensure food security, said Sushil Pandey, an agricultural economist at the International Rice Research Institute in
But those stockpiles were costly to maintain. So governments have been drawing them down as world rice consumption has outstripped production for most of the last decade.
The relatively small quantities traded across borders, combined with small stockpiles, now mean that prices can move quickly in response to supply disruptions.
At the same time, prices set in international rice trading now have an increasingly important effect on prices within countries. This has been particularly true in an age of Internet and mobile phone communications when even farmers in remote areas can learn about distant prices and decide whether their own buyers are giving them a fair price.
Even before governments imposed restrictions this week, trading companies in exporting nations had become increasingly reluctant to sign contracts for future delivery as they wait to see how high prices will go.
“The market has pretty much ground to a halt for the past few weeks,” said Ben Savage, the managing director for rice at Jackson Son & Company, a commodities trading firm in
In a crumbling covered market in an old neighborhood of
Together with rising prices for other foods, like wheat, soybeans, pork and cooking oil, higher rice prices are also contributing to inflation in many developing countries. Retail rice prices have already jumped by as much as 60 percent in recent months in
Rice is unusual among major agricultural commodities in that most of the major rice-consuming countries are self-sufficient or nearly so. Only 7 percent of the world’s rice production is traded across international borders each year, according to figures from the United Nations Food and Agriculture Organization in
Nguyen Van Bo, the president of the Vietnam Academy of Agricultural Sciences, which oversees government farm research institutes, said in an interview that the government expected rice production to rise further by 2010 despite the rapid expansion of residential housing and factories into what had been prime rice-growing land. But the government needs to train farmers to alternate corn with rice to defeat rice pests like the virus, he said.
Vietnam, Egypt and India all limited rice exports last year, but the limits were much less drastic and were imposed much later in the year, after much more rice had been shipped.
The government of
Even before Friday’s export restrictions by
Governments have been reluctant to tell farmers to sell their rice at low fixed prices, for fear that farmers would hoard rice or not bother to grow as much as they could. On Friday,
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