Rice jumps to record high on Philippines' lead
Rice climbed to a record for a second day as the Philippines, the world's biggest importer, sought to buy 1 million metric tons and floods delayed planting in the US, increasing concern that there's a global shortage of the grain.
The Philippines will hold a tender tomorrow for 500,000 tons of rice, with another to follow on May 5. A March tender filled just 61 percent of requirements at prices double those of six months earlier. Last year, the country imported 1.9 million tons of rice, equivalent to about 15 percent of annual needs.
Rice in Chicago surged 2.3 percent yesterday to $22.67 per 100 pounds on rising demand and export curbs from some producing nations, stoking global concern about inflation and the potential for social unrest. Rice is the staple food for half the world.
"We've seen an unprecedented bull run in rice prices," Luke Chandler, senior commodities analyst at Rabobank Group, said in an interview with Bloomberg Television. "It's almost becoming like a supply shock because the countries that rely on the imports aren't able to access the available sources."
Rice futures on the Chicago Board of Trade, which have more than doubled in the last 12 months, traded at $22.60 per 100 pounds at 2:28 p.m. in Singapore.
Farmers in Arkansas, the biggest rice-growing state in the US, have planted just 2 percent of this year's crop compared with 31 percent last year after heavy rains, according to an April 14 report from the US Department of Agriculture.
Wheat, corn and soybeans have also risen to records this year on lower global stockpiles and rising demand. Kazakhstan, the world's fifth-biggest wheat exporter, halted shipments of that grain until Sept 1 to "ensure food security", according to Prime Minister Karim Masimo.
The World Bank has said 33 countries may face unrest because of surging food costs and deepening poverty. Haitian Prime Minister Jacques Edouard Alexis was voted out of office this month by the country's senate after violent protests over food costs.
"Overall, commodity prices will remain strong following tight global supplies, especially for food," said Hiroyuki Kikukawa, an analyst at IDO Securities in Tokyo. Crude oil in New York traded above $113 a barrel yesterday.
The Philippines' March 11 tender secured 335,500 metric tons of rice for delivery between March and next month, short of the 550,000 tons that was sought, according to the state-run National Food Authority. The prices ranged from $618.15 a ton to $747 for the grades purchased, including freight costs. That compares with about $340 to $350 paid at a Philippine tender on Sept 12.
"Rice prices are likely to remain at elevated levels or rise even further in 2008," the Royal Bank of Scotland Group Plc's Sanjay Mathur and Euben Paracuelles wrote in a report on Tuesday. "The origins of this surge lie in supply-side disruptions."
China, Egypt, Vietnam and India, representing more than a third of global rice exports, have curbed sales this year. Indonesia, the world's third-largest rice grower, said yesterday that the nation would be able to export rice only after domestic stockpiles in state-run warehouses total 3 million tons.
Republic of Korea said on April 15 that Asia's fourth-largest economy will seek to farm rice and other grains overseas, potentially in eastern Russia, to secure a stable supply of food as prices surge.
President Lee Myung Bak warned that the higher food prices "may even cause a problem" in securing humanitarian aid for Democratic People's Republic of Korea, which has a projected grain deficit this year of 1.66 million tons, the Rome-based Food and Agriculture Organization said on April 11.
Agencies
(China Daily 04/17/2008 page17)
