Asia weary of rice prices hike

Bangladesh News
Independent Bangladesh
Sunday, 30 March 2008

Philippine activists warn about possible riots. Aid agencies across Asia worry how they will feed the hungry. Governments dig deeper every day to fund subsidies, reports AP.

A sharp rise in the price of rice is hitting consumer pocketbooks and raising fears of public turmoil in the many parts of Asia where rice is a staple. Part of a surge in global food costs, rice prices on world markets have jumped 50 percent in the past two months and at least doubled since 2004.

Experts blame rising fuel and fertilizer expenses as well as crops curtailed by disease, pests and climate change. There are concerns prices could rise a further 40 percent in coming months.

The higher prices have already sparked protests in the Philippines, where a government official has asked the public to save leftover rice. In Cambodia, Prime Minister Hun Sen ordered a ban on rice exports Wednesday to curb rising prices at home. Vietnamese exporters and farmers are stockpiling rice in expectation of further price increases.

Prestoline Suyat of the May One Labor Movement, a left-wing workers group, warned that "hunger and poverty may eventually lead to riots." The neediest are hit hardest. Rodolfo de Lima, a 42-year-old parking lot attendant in Manila, said "my family will go hungry" if prices continue to rise.

Vietnam has cut its 2008 rice export target to 3.5-4 million tons from its initial goal of 4- 4.5 million tons to ensure the country''s food security, according to local newspaper Labor. The Vietnamese government has also asked businesses to temporarily sign new rice export contracts.

Local firms have inked contracts of shipping abroad 1.8 million tons of rice this year. Vietnam, the world''s second biggest rice exporter after Thailand, is estimated to export 859, 000 tons of rice worth 366 million U.S. dollars in the first quarter of this year, posting respective year-on-year rises of 5.3 percent and 42.6 percent, according to the country''s General Statistics Office.

It sold overseas 4.5 million tons of rice worth nearly 1.5 billion dollars, mainly to the Philippines, Malaysia, Cuba, Indonesia and Japan, in 2007. Another reports from Hanoi adds: Fertilizer prices in Vietnam have increased by 59-300 percent, the highest level over the past 35 years, due to rising material costs and world prices, according to local media.

In February, prices of super phosphate and nitrogen- phosphate- kalium (NPK) fertilizers increased respectively by 126 percent to 2.5 million Vietnamese dong (VND) (nearly 156.3 U.S. dollars) per ton, and 80 percent to nearly three million VND (187.5 dollars) over the same period last year, newspaper Vietnam News reported.

Meanwhile, costs of diammonium phosphate (DAP) and kalium fertilizers even tripled to 18 million VND (1,125 dollars) per ton and doubled to nine million VND (562.5 dollars), respectively.

The Vietnam Fertilizer Association has proposed the government to cease export of antraxit, a main material for fertilizer production, and facilitate fertilizer producers in terms of loan accession. Local fertilizer demand is estimated at over 8.3 million tons this year.

The country is expected to increase its annual urea fertilizer production capacity to 1.7-1.8 million tons by 2011 from the current 900,000 tons. Vietnam is estimated to import 999,000 tons of fertilizers worth 375 million dollars in the first quarter of this year, posting respective year-on-year rises of 18.2 percent and 106.1 percent, according to the General Statistics Office.

Cambodia''s prime minister Hun Sen on Wednesday banned rice exports in a bid to halt the staple food''s spiraling prices, which have reached highs of nearly one dollar a kilogramme. The move comes amid the steady climb in the price of most staple goods, including the doubling of the cost of cooking gas, which has put increasing strain on large numbers of Cambodians.

''Cambodia will halt the export of rice for two months,'' Hun Sen said.

''It is a temporary measure ... but it is to ensure food security,'' he added. Rice prices have risen sharply from about 40 cents a kilogramme as speculation of shortages grip local markets, sparking demands that the government put a cap on costs. But Hun Sen said Tuesday that Cambodia is experiencing a rice surplus, and blamed the price hike on ''economic sabotage'' - people spreading rumours of dwindling rice supplies in a bid to undermine the government.

Despite GDP growth averaging 11 per cent over the past three years, more than a third of the country''s 14 million people live on less than 50 cents a day, making even the slightest rise of food costs devastating to Cambodia''s poorest. Petrol remains at record highs on the back of global oil prices while inflation cracked the double digits late last year, hovering around 11 per cent and further driving up food costs.