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Thailand pledges rice, India to repress hoarding as prices rise

Thailand pledges rice, India to repress hoarding as prices rise
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First Published: Sat, Apr 05 2008. 12 40 AM IST

Only a handful: A cut in rice exports by China, India, Egypt and Vietnam has hiked prices, contributing to food riots in Ivory Coast and anti-hoarding campaigns in Pakistan and the Philippines.
Only a handful: A cut in rice exports by China, India, Egypt and Vietnam has hiked prices, contributing to food riots in Ivory Coast and anti-hoarding campaigns in Pakistan and the Philippines.
Updated: Sat, Apr 05 2008. 12 40 AM IST
Bangkok: Thailand, the world’s biggest rice exporter, pledged to maintain supplies and India vowed to crack down on hoarding as shortages drove prices to a record level and threatened to trigger protests in Asia and Africa.
Only a handful: A cut in rice exports by China, India, Egypt and Vietnam has hiked prices, contributing to food riots in Ivory Coast and anti-hoarding campaigns in Pakistan and the Philippines.
The nation “has enough rice for export to neighbouring countries” and may be able to deliver as much as 1.2 million tonnes (mt) a month, Prasert Gosalvitra, head of the rice division of Thailand’s farm ministry, said on Friday in Bangkok. Thailand has shipped about 1.1mt of rice a month since October, he said.
Rice, the staple food for about 3 billion people, gained 1% to its highest ever in Chicago on Friday after doubling in the past year. Higher imports by the Philippines, the biggest buyer, and export cuts by China, India, Egypt and Vietnam pushed up prices, contributing to food riots in Ivory Coast and anti-hoarding campaigns in Pakistan and the Philippines.
“We expect a significant rise in prices, well above the long-term average, in the short-to-medium term,” Les Gordon, president of the Rice Growers Association of Australia, said on Friday. Population growth, urban encroachment on land, and rising grain prices are contributing to the increase.
Rice for May delivery rose 20 cents to a record $20.40 (Rs816) per 100 pounds (45.4kg) on the Chicago Board of Trade. Global exports will drop 3.5% this year as nations curb sales, the United Nations’ Food and Agriculture Organization said on 2 April. World cereal usage will increase 2.6% to 2.12 billion tonnes in 2007-08, the agency had said in February.
“We’re planning for the assumption these prices will remain high for some time,” Paul Risley, a spokesman for the United Nations’ World Food Program in Bangkok, said. “The number of our suppliers has decreased dramatically. We’re forced to pay very high prices.”
The World Bank estimates 33 countries face potential social unrest because of increasing food and energy prices, Robert Zoellick, its president, said on its website on 2 April.
India’s commerce and industry minister Kamal Nath said on Friday the government will punish hoarding of essential commodities. “We will not hesitate to take the strongest possible measures, including using some of the legal provisions that we have against hoarding,” Nath told reporters in Singapore.
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 led by China outpaced supplies of metals and crops. The Standard and Poor’s 500 Index of US equities gained about 22% over the same period.
India’s inflation accelerated at the fastest pace in more than three years in the week ended 22 March. Philippine inflation quickened at the fastest pace in 20 months in March. Consumer prices gained 8.7% in February in China, an 11-year high. Food prices in the country, based on a government index, jumped 28% in February, the most since July.
Record wheat prices threaten social stability too. As many as seven people have 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. The Philippines government had asked fast food chains and restaurants to serve half portions of rice to cut wastage, agriculture secretary Arthur Yap said on 19 March.
Still, a Wellcome supermarket in Hong Kong on Friday was stacked with rice from China and Thailand, an effort to increase supplies. The store said hoarding was caused by media reports and that supply of Thai rice has been stable.
Prasert from the Thai farm ministry said the country can’t export more than 1.2mt of rice a month. “We’re ready to help solve the global food crisis, but we have to be sure our people are taken care of,” he said. “It’s not possible to ship 3mt a month. The maximum we can do is 1.2mt.”
The Philippine government on Friday pledged more money to increase rice supplies. State banks may lend as much as 20 billion pesos (around Rs1,931 crore) to the National Food Authority to buy rice, and to farmers to boost output, finance secretary Gary Teves told reporters in Manila.
The country may raise imports of milled rice by as much as 42% to 2.7mt this year from 1.9mt in 2007 to discourage speculation by local traders, farm minister Yap had said on 26 March. The Philippines has asked Japan to allow it to draw from grains pledged under the regional emergency reserve programme, said Jessup Navarro, administrator of the National Food Authority which handles government rice imports in the Philippines. “We’ve put in the request, but we still haven’t heard from them...We’ll take whatever they can give us.”
Feiwen Rong and Jean Chua in Singapore, Kartik Goyal in New Delhi and Luzi Javier in Manila contributed to this story.
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First Published: Sat, Apr 05 2008. 12 40 AM IST
More Topics: Rice | Thailand | Philippines | China | India |