Rising rice prices in Asia
MANY of Asia's governments and international aid agencies are increasingly worried by the dramatic rise in rice prices in the region recently. The spiralling rise in rice prices, a stable food for most Asians, has also fuelled fears of social unrest if it is not controlled soon.
The price of rice has more than doubled throughout the region within the last two months. In some countries, including Thailand, many consumers are beginning to panic-buy rice, while many growers are hoarding their stocks in the hope of getting an even better price in the coming months.
Many international agencies, including the UN's World Food Program, are increasingly concerned that their food aid programs may have to be severely reduced if more funds are not found quickly. In many countries the price of rice seems to rising daily.
In Bangkok, shoppers have begun to buy more than they need for their immediate needs for fear that the supermarkets were going to run out of stocks in the near future. Niratcha Sunthonsak, a 20-year-old single parent, who has to support her 2-year old son and 50-year old mother, told IPS that she was frightened about the future. She's buying as much as she can every day.
"Rice price has more than doubled since the beginning of the year," she complained. "Everything is more expensive, but my salary has not increased," she said. "I have hocked my jewellery (with the pawn broker) to buy extra supplies this week. If the price continues like this I don't what I will do -- I already can't take my son to the dentist or doctor," she moaned (grumbled).
All throughout Asia the story is the same. Last week, the Cambodian prime minister urged Cambodians not to panic-buy or hoard rice. Many governments have begun to take precautions, and ban exports of rice to try to stem the rise and dampen the market.
In the past few weeks leading rice exporters, including Eygpt, India and Pakistan have halted almost all exports of rice, at least for the time being, while China and Vietnam have dramatically reduced their exports.
"But by stabilising your domestic market you are basically exporting the instability abroad," said Sumiter Boca, a policy officer with the Food and Agriculture Organisation's regional headquarters in Bangkok.
World stocks of grain are at their lowest in more than twenty years, according to agricultural experts. Rice stock is at its lowest since 1976. And there is no end to the crisis in sight. "I don't think we'll see (rice) prices fall precipitously any time soon," said Ted James, the principle economist at the Asian Development Bank in Manila.
But many aid experts blame speculation and media reports about the prospect of further rises in rice prices for fuelling the regional crisis. UN officials and aid workers certainly believe that is part of what is driving the price up in Thailand. Last week alone, rice prices doubled within seven days.
"If people are saying that prices are going up to $1,000 per tonne you can count on it that there are people who are going to hoard, who are going to sit on their stocks and wait until this happens," Jack Keulemans, a regional procurement officer for the WFP, told reporters in Bangkok last week.
The Thai Rice Exporters Association has projected that rice prices could top $1,000 per tonne by June, up from between $600 and $700 per tonne now. The country's Commerce Minister, Mingkwan Sangsuwan, recently urged farmers not to sell paddy immediately, saying it could fetch a higher price in a few months. But leading rice growers and exporters immediately rejected this advice.
"Rice trading is facing a crisis due to the absence of supply, while prices are unbelievable," said Chookiat Ophaswongse, president of the Rice Exporters Association. "We should let the price rise according to the (free) market mechanism, but not from speculation," he added.
In Thailand, the world's largest exporter, millers are storing rice and defaulting on contracts with exporters, according to industry experts.
"Exporters who have stocks are making a lot of money, as millers who have supply contracts are not actually delivering the rice," said Vichai Sriprasert, president of Riceland International, a major Thai rice exporter. "I believe the losses are considerable for those who don't have physical control of the rice."
Farmers, though, do not appear to be benefiting from the rising prices, according to Prasit Boonchuey, president of the Thai Farmers' Association as, they have had to sell their grain immediately after it was harvested because of the lack of storage facilities.
The WFP is watching the rising price of rise, especially in Thailand, with alarm. "I have sleepless nights," Keulemans, who procures rise for the organisation, admitted.
"As prices go up in the world market many millions of people across Asia will face food shortages and possible starvation," Paul Risely, WFP's regional spokesman told IPS. "Everyday we are battling to procure food; and everyday millions of people in Asia are in greater danger of going hungry," he said.
WFP estimates that at present prices, it needs more than another $ 160 million to maintain its current programme commitments.
"There is a potential for a significant humanitarian crisis as a result, we have already seen unrest in some places in the regions where rice price rises have affected people," Risely stressed.
"If the funds are not forthcoming, WFP will have to reduce the size of the rations it provides, or reduce their frequency -- once a fortnight instead of once a week. Only as a last resort would we stop distribution all together," he admitted.
WFP is not alone in facing this pending crisis. Thousands of Burmese refugees in Thailand are now facing another danger -- starvation.
"The rice price is killing us," said Jack Dunford, head of a consortium of agencies that provides food, shelter and other aid to more than 140,000 ethnic minority refugees along the border with Thailand. The agency has appealed to its donors for more funds, but is already seriously considering reducing the meagre rations it provides the refugees.
"This is a very vulnerable group of people," Dunford said.
His sentiments mirror most aid workers' and UN officials' providing support for the poorest people in the region. "They are the ones who are going to suffer most if the rise in prices continues to sky-rocket," said WFP's information officer, Paul Risely.
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