Business | Markets
Panic likely to subside as more rice is planted
global rush for rice that has heightened food security anxiety across Asia should slow in coming months, as consumer nations replenish lowly stocks, extra crops boost supplies and a sense of panic subsides.
- Reuters
- Published: 00:38 April 12, 2008
Singapore: A global rush for rice that has heightened food security anxiety across Asia should slow in coming months, as consumer nations replenish lowly stocks, extra crops boost supplies and a sense of panic subsides.
Rice output is set to rise this year as major producers plant additional crops, likely slowing or halting a rally that has caused prices to more than double since January and added a new element of political risk to policymakers' inflation headache caused by the surge in global food prices.
Even before those fresh crops hit the market rice analysts and traders expect the frenzy of recent purchases to ebb as importers grow more confident on future supplies.
"Governments are desperate to build supplies before things worsen. They are now better positioned. This increases the likelihood that a crisis can be averted," said Abah Ofon, a soft commodities analyst at Standard Chartered Bank.
The growing unease over rice supplies reached fever pitch in recent weeks as surging food inflation prompts some of the world's top suppliers to curb exports, hoping to tame prices at home - while goading them higher abroad.
Benchmark Thai 100 per cent parboiled rice soared from $500 a tonne in late February to a record of nearly $925 a tonne this week, even though prices normally start coming off as harvests peak from April to July.
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