Rice: Panic
April 18th, 2008Via: Financial Times:
Rice prices hit the $1,000-a-tonne level for the first time on Thursday as panicking importers scrambled to secure supplies, exacerbating the tightness already provoked by export restrictions in Vietnam, India, Egypt, China and Cambodia.
The jump came as the Philippines, the largest rice importer, failed for the fourth time to secure as much rice as it wanted.
The unsuccessful tender followed Bangladesh’s inability to buy any rice at all this week.
Traders and analysts warned that rice demand was escalating in spite of prices rising to three times the level of a year ago as countries try to build up stocks.
Vichai Sriprasert, president of Riceland International, a leading rice exporter in Bangkok, said several of its customers, including governments, were buying far more than they usually did amid fears about scarcity.
“It is panic,” he said. “My customers are demanding double the usual volume. We would not have enough supplies for all the demand we are facing.”
Michael Whitehead, a rice specialist at Rabobank in New York, added: “The potentially destabilising social effect of rice shortages in most high-consumption countries has strengthened the resolve of governments to build supply.”
Rising rice prices have triggered riots in the past month in countries such as Haiti, Bangladesh and Ivory Coast. Rice is considered the most political agricultural commodity as it is a staple for about 3bn people in poor countries in Asia and Africa.
Ajith Nivard Cabraal, Sri Lanka’s central bank governor, told the Financial Times that the rise in food prices was “definitely” a bigger problem for Asia than the ongoing credit crunch.
“Food is something which without we cannot live,” he said. “Social consequences could be very adverse.”
There are a bunch of grain futures charts here: http://quotes.ino.com/exchanges/?c=grains
Seems that most food prices have doubled (in USD) over the past 12-14 months.