The soaring price of rice has triggered a supply and demand crunch that is hurting some of Asia's neediest nations, forcing them to spend more on imports, industry experts and officials say.
For the likes of Thailand and Vietnam, the world's two biggest exporters of the grain, the rising demand is a money-spinner with rice now selling at more than US$500 a tonne in Bangkok and nearly as much in Hanoi.
But from Bangladesh to the Philippines, from India to Indonesia, the squeeze is bad news as they seek to balance cost with the imperatives of feeding hungry populations and averting social chaos.
PHOTO: AP
"Every Asian government is well aware of the close relationship between political stability and the stability of the rice price," said Jonathan Pincus, the UN Development Programme's chief economist in Vietnam.
"So every government in the region will be doing all it can to maintain price stability, particularly for basic food grains," he said.
At the end of last month, Thailand's benchmark rice was trading at more than US$500 a tonne, a rise of more than US$100 from a month earlier and up from just US$325 a year ago.
Exporters in Vietnam meanwhile were setting prices at US$460 a tonne last month, the state news agency VNA said -- up more than 50 percent from a year ago.
"It's a global issue. All cereal prices are going up," said Andrew Speedy, the UN Food and Agriculture Organization's Vietnam representative. "This is quite serious. It's hurting everybody, especially the poor."
In the first two months of this year, Vietnam's rice exports brought in US$150 million , an increase of 78 percent from a year ago.
Much of the output is destined for the Philippines, whose President Gloria Arroyo asked Vietnamese Prime Minister Nguyen Tan Dung last month to guarantee stable supplies.
Unable to meet its own needs, the Philippines will import up to 2 million tonnes of rice this year, the government said.
Last year its harvest was 6.44 million tonnes, National Food Authority spokesman Emmanuel Salonga said, but it needs 11.8 million a year.
"Our population is growing and arable land is being converted to other uses so we cannot cope with demand," he said.
Indonesia's rice production has been outpaced by its population growth for more than a decade, said Mangara Tambunan from the country's Center for Economics and Social Studies.
"The government has to open the door to more imports. It should not be so reticent," he said.
Last year, Indonesia imported 1.5 million tonnes.
To ensure stability, a government agency buys and releases stocks and sets import duties. Heavily subsidized rice is also sold to millions of the poorest families, yet even those prices are rising.
"They're trying to get producers to sign long-term contracts," Pincus said, referring to Indonesia and the Philippines.
In Bangladesh, which has a population of 144 million, the price of rice has doubled in a year, vastly outpacing income levels, said Ruhul Amin, deputy head of the government's food planning unit.
"People are cutting all their other spending to focus only on food," Amin said.
But with 40 percent of the population relying on US$1 a day or less, the poorest are struggling to survive.
"They have to survive on a pittance, and the rises are causing a general feeling of gloom and depression," he said.
This year Bangladesh will need to import some 3 million tonnes due to damage caused by floods in the middle of last year and November's devastating cyclone.
Some of that is coming from neighboring India, but otherwise New Delhi has halted exports of non-basmati rice to keep its own domestic prices in check.
India allowed the export of 3.2 million tonnes of non-basmati rice in the first half of the current financial year, but since October no new contracts have been signed.
The move has upset the All India Rice Exporters' Association.
"Farmers react to high prices by producing more," said its president, Vijay Sethia. "Restricting trade just distorts the price signal."
For now, some nations appear insulated against rising prices. China, Japan and South Korea are largely self-sufficient and protect their rice sectors via steep import tariffs or heavy subsidies.
In Japan, the price of high-quality rice is even waning with falling demand as younger Japanese turn to bread and Western-style dishes.
As for China, its severe cold snap earlier this year is unlikely to impact production much as it was not the planting season.
The freeze may drive up prices, said Feng Lichen, a trader at the Dalian Commodity Exchange.
The US government has signed defense cooperation agreements with Japan and the Philippines to boost the deterrence capabilities of countries in the first island chain, a report by the National Security Bureau (NSB) showed. The main countries on the first island chain include the two nations and Taiwan. The bureau is to present the report at a meeting of the legislature’s Foreign Affairs and National Defense Committee tomorrow. The US military has deployed Typhon missile systems to Japan’s Yamaguchi Prefecture and Zambales province in the Philippines during their joint military exercises. It has also installed NMESIS anti-ship systems in Japan’s Okinawa
‘WIN-WIN’: The Philippines, and central and eastern European countries are important potential drone cooperation partners, Minister of Foreign Affairs Lin Chia-lung said Minister of Foreign Affairs Lin Chia-lung (林佳龍) in an interview published yesterday confirmed that there are joint ventures between Taiwan and Poland in the drone industry. Lin made the remark in an exclusive interview with the Chinese-language Liberty Times (the Taipei Times’ sister paper). The government-backed Taiwan Excellence Drone International Business Opportunities Alliance and the Polish Chamber of Unmanned Systems on Wednesday last week signed a memorandum of understanding in Poland to develop a “non-China” supply chain for drones and work together on key technologies. Asked if Taiwan prioritized Poland among central and eastern European countries in drone collaboration, Lin
TRAGEDY STRIKES TAIPEI: The suspect died after falling off a building after he threw smoke grenades into Taipei Main Station and went on a killing spree in Zhongshan A 27-year-old suspect allegedly threw smoke grenades in Taipei Main Station and then proceeded to Zhongshan MRT Station in a random killing spree that resulted in the death of the suspect and two other civilians, and seven injured, including one in critical condition, as of press time last night. The suspect, identified as a man surnamed Chang Wen (張文), allegedly began the attack at Taipei Main Station, the Taipei Fire Department said, adding that it received a report at 5:24pm that smoke grenades had been thrown in the station. One man in his 50s was rushed to hospital after a cardiac arrest
ON ALERT: Taiwan’s partners would issue warnings if China attempted to use Interpol to target Taiwanese, and the global body has mechanisms to prevent it, an official said China has stationed two to four people specializing in Taiwan affairs at its embassies in several democratic countries to monitor and harass Taiwanese, actions that the host nations would not tolerate, National Security Bureau (NSB) Director-General Tsai Ming-yen (蔡明彥) said yesterday. Tsai made the comments at a meeting of the legislature’s Foreign Affairs and National Defense Committee, which asked him and Minister of National Defense Wellington Koo (顧立雄) to report on potential conflicts in the Taiwan Strait and military preparedness. Democratic Progressive Party (DPP) Legislator Michelle Lin (林楚茵) expressed concern that Beijing has posted personnel from China’s Taiwan Affairs Office to its
RSS