Rice jumps as
By Javier Blas in
Published: April 4 2008 15:23 | Last updated: April 4 2008 19:22
Rice prices rose more than 10 per cent on Friday to a fresh all-time high as African countries joined south-east Asian importers in the race to head off social unrest by securing supplies from the handful of exporters still selling the grain in the international market.
The rise in prices – 50 per cent in two weeks – threatens upheaval and has resulted in riots and soldiers overseeing supplies in some emerging countries, where the grain is a staple food for about 3bn people.
The increase also risks stoking further inflation in emerging countries, which have been suffering the impact of record oil prices and the rise in price of other agricultural commodities – including wheat, maize and vegetable oil – in the last year.
Thai medium-quality rice, a global benchmark, traded at about $850 a tonne on Friday, up from $760 a tonne last week, while the price of less representative top-quality aromatic rice broke the $1,000-a-tonne level for the first time, traders said. They added that the grain was being sold to African destinations.
Although only a small amount of the grain is traded internationally, the rise in Thai prices signals the trend for the global market and also for domestic prices in countries where local production is enough to meet demand.
The price jump
came as leading exporting countries, including
Food aid officials said consumption could rise further because record food prices are forcing families to move from a diversified diet to just one staple.
Farmers delaying their harvest and middleman hoarding stocks are also contributing to the crisis, said governments and traders.
In the past weeks, traders and diplomats have warned that many West African countries, where rice is a staple, had yet to purchase the grain this year, leaving them subject to record prices now.
Some countries postponed their imports earlier this year when prices started to climb, in the hope that the increase was a short-term anomaly, but now these countries are buying, traders said. Rice-importing countries are responding to the price surge by slashing custom duties and reforming their purchase systems to secure the grain.
Copyright The Financial Times Limited 2008