Business | Economy
US rice futures surge over 4% to new high
Analysts have warned that the world faces high prices for the grain in the foreseeable future as exports shrink.
- Reuters
- Published: 00:33 April 19, 2008
Sydney, London: US rice futures set a fresh high yesterday, surging by more than four per cent as a scramble to bolster stockpiles of Asia's staple food showed little signs of abating.
Chicago Board of Trade corn futures were steady, holding just below a record high set on Thursday as traders eyed a modest setback in the crude oil prices, and wheat markets showed mixed trends with the US edging up but Europe slightly down.
US July rough rice futures rose to $24.670 a hundredweight, a fourth successive record high, taking this year's gains to nearly 78 per cent after unease over shrinking food supplies prompted several suppliers to cut back on exports. Analysts have warned that the world faces high rice prices for the foreseeable future.
"Rice's rise shouldn't be seen as temporary, but part of the bull market that has hit commodities across the board," said Akio Shibata, director at Marubeni Research Institute in Tokyo.
"It is likely to stabilise at a high level, or even move higher," he said. "Supply just cannot keep up with demand."
Tightening supplies were evident in the Philippines, the world's biggest rice importer, where authorities received offers for only 325,750 tonnes of rice in a tender for 500,000 tonnes, the third time in a row it has failed to secure the full amount. "Countries are racing to ensure they have enough supplies to feed their own population, and exporting only the surplus," Shibata said.
On top of that, rice planting in several US states, including top producer Arkansas, is off to a slow start due to overly wet conditions. Although the United States is not a major exporter, many buyers are looking to US shipments to partly make up for curbed output from Vietnam, India and elsewhere. In Chicago trading on Thursday, rice futures rose by their maximum allowed limit of 75 cents.
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