Rice Crisis News Monitor #4

Rice Crisis News Monitor

News compiled by BAYAN USA, Los Angeles, CA

1. Farmers to stage recorridas vs ‘rice crisis‘ (Sun Star)
2. World suffering food crisis, UN official says (Agence France Press)
3. NFA to increase retail price of rice (Inquirer)
4. High prices of rice to remain for two years (Manila Times)
5. Call for urgent redressal of Asia’s “Rice price crisis” (Thai India News)
6. White out: Asia”s rice price crisis (Bangladesh News)

Saturday, April 12, 2008
Farmers to stage recorridas vs ‘rice crisis
By Ben O. Tesiorna

A MILITANT farmers group is spearheading a three-day “recorrida” here in Davao City to publicly declare the existence of a rice crisis despite the denial of government officials.

A recorrida is a public address system set up on a vehicle.

Arroyo Watch: Sun.Star blog on President Arroyo

The Kilusang Magbubukid ng Pilipinas (KMP) has started its protest action Friday where it distributed and posted leaflets among major public markets in Davao City to confirm the existence of a rice crisis in the country.

“Kinukumpirma ng KMP na may krisis ng bigas sa bansa at maging sa ibang bansa bunsod ng mataas na demand habang mababa naman ang suplay nito. Dahilan din ang pagiging palagiang nakaasa ang Pilipinas sa pag-aangkat nito na syang dahilan kung bakit sumisirit ang presyo nito sa merkado,” the KMP said in a text message. (KMP is confirming that there is a rice crisis in the country and even in other nations due to high demand and low supply. This is due to the country’s dependence on rice importation.)

“Dahil dito, nananawagan ang KMP na kontrolin ang presyo ng bigas, itigil ang importasyon ng bigas, pataasin ang binibiling lokal na bigas ng NFA at ipaglaban ang tunay ng repormang agraryo,” the group added. (Because of this, KMP is appealing to government to control the price of rice, stop importation of the supply, increase NFA’s buying price of rice, and implement real agrarian program.)

The militant farmers distributed leaflets and conducted anti-rice price increase recorridas in Bankerohan, NFA office at Sta. Ana, Boulevard, NCCC Uyanguren, and at San Pedro Church Friday.

On day 2, April 14, the group will be going around SSS, Agdao market, Sasa, Tibungco, Buhangin and at Freedom Park.

On day 3, April 16, they will be at the Matina public market, Ulas, Toril, NCCC Mall, Gaisano Malla and Unitop.

The KMP is urging all consumers to join the call for a stop to the rice price increase and support the call for a hike in the price of local rice procurement.

House Speaker Prospero Nograles meanwhile branded the plan of NFA to increase the price rice as ill timed. He said the government must first exhaust all available options to cushion the spiraling prices of rice and other basic commodities before even thinking of increasing the price of NFA rice.

“Tao muna, bago kita (People first, before us). Precisely, that’s why there is NFA rice to serve as a buffer and for people to have access to the staple food. I don’t think this is a wise idea when the poor are sweating under the scorching heat of the sun lining up just for two kilos of NFA rice,” Nograles said.##

World suffering food crisis, UN official says

21 hours ago

MANILA (AFP) — A senior UN official said Friday there was a global food crisis after meeting the Philippine president to discuss the impact of soaring prices, which have triggered unrest in dozens of countries.

“There is a world food crisis,” said Kevin Cleaver, an assistant president in a department of the UN International Fund for Agricultural Development, who met with President Gloria Arroyo in Manila.

The Philippines is one of the world’s largest rice importers and the government is striving to avoid shortages as worldwide concern grows about sharp increases in food prices.

Cleaver said that “in some 33 countries there is now civil disturbance, food riots caused by food shortages and higher prices. This is one of the subjects we discussed.”

Analysts have warned that higher prices could trigger unrest in the Philippines, following rioting in countries such as Haiti and Egypt.

Cleaver said people were suffering because the “price of rice and food has increased and we discussed a little bit what to do about that,” adding he and Arroyo had agreed the solution was to ramp up production.

The president has pledged to keep supplies of the staple grain available to every Filipino, drafting in the military to distribute supplies and cracking down on looters and hoarders.

The president said the government had a plan for better irrigation facilities, according to Cleaver. That would help in the coming year but the shorter-term problem was more difficult to cure, he said.

He added that the world had been taken by surprise because “most people have been complacent,” but said governments can take steps to avoid starvation.

Cleaver said the UN agency would finance a 66-million-dollar agricultural and rural development programme for two of the poorest regions in the Philippines.

The International Rice Research Institute warned Friday that rice prices were likely to keep rising for some time as production fails to keep up with soaring demand.

NFA to increase retail price of rice

By TJ Burgonio
Philippine Daily Inquirer
04/12/2008

MANILA, Philippines — Despite strong objections by lawmakers, the National Food Authority is increasing the price of the rice it sells by less than P1 in the next few months, NFA Assistant Administrator Conrado Ibañez said Saturday.

Ibañez, speaking at a press forum in Quezon City, justified the need to adjust the current P18.25 rice per kilo of NFA rice after it increased its buying price of palay from P12 to P17 per kilo.

He said that NFA rice was pegged at P18.25 even when it was purchasing palay (unhusked rice) at P12, hence, the need for an upward adjustment in the price of milled rice now that it buys palay at P17 per kilo.

”There has to be an adjustment in the selling price of NFA rice,” Ibañez told reporters.

”Within the P1 range,” he said when asked how much the increase will be. He said he “believed” this would take effect in the next few months although he did not explain the reason for the time lag.

NFA Administrator Jessup Navarro had said that the agency was considering adjusting the price of subsidized rice to reduce its losses and help farmers boost their income.

Lawmakers had cautioned the agency against this, saying this would make rice more unaffordable but at the same time raise the profits of rice traders, and could trigger violence.##

High prices of rice to remain for two years

Focus on looking for solutions, not on panicking, say rice experts

Rice prices are likely to keep rising for some time as production of the popular cereal fails to keep up with soaring demand, the International Rice Research Institute (IRRI) said Friday.

The institute is based in Los Baños town, Laguna province, south of Manila.

Speaking also in Los Baños during a meeting called by the institute’s board of trustees, an official of an Asian rice organization said the currently high prices of the staple of millions worldwide will last for 24 more months.

“There is no possibility of rice prices going down in the next two years,” said M. Syeduzzaman, chairman of BOC Bangladesh Ltd., Bank Asia Limited, Bangladesh Rice Foundation.

Philippine Agriculture Secretary Arthur Yap, who was also at the meeting, explained that rice prices are determined by production costs, exports, fertilizers, weather changes, and other factors.

Yap said the institute’s trustees told him that the Philippines is not among the 33 to 36 countries that are already experiencing social unrest because of the soaring rice prices. He mentioned, though, that the country has 4.7 million families that are vulnerable, and 2.7 million most vulnerable, under such trend.

He announced that he will meet with Quezon City Mayor Feliciano Belmonte, Caloocan City Mayor Echiverri, Mandaluyong City Mayor Benhur Abalos, and Manila Mayor Alfredo Lim today to ask for their help in identifying the vulnerable families in their cities.

Yap said he will also tap local-government units to help the Agriculture department identify such families.

Dr. Robert Zeigler, director general of the IRRI, said the Philippines has already secured import supplies from Vietnam and other countries, aside from the domestic production of the country. He said that if ever the country experienced problems in importing rice to shore up its requirements, it can look at roots crops as alternatives.

The IRRI trustees stressed that the situation at present is not about rice shortage but more on “rice-price crisis.”

They called on the international community, particularly donors, to start focusing on solutions to the rice-price crisis.

“Increased production is needed to ease the sharp rise in rice prices that has swept across the region, causing uncertainty and concern,” the institute’s trustees said.

Possible solutions

Prof. Elizabeth Woods, the newly appointed board chairman, said “the problems related to rice production and supply in Asia over the past year or so are a cause for serious concern, but not for panic.”

The institute recommended heightened attention by the public and private sectors to six key areas: agronomic revolution in Asian rice production to reduce existing yield gaps; acceleration of delivery of new post-harvest technologies; stepping up of introduction of higher yielding rice varieties; strengthening and upgrading rice breeding and research pipelines; acceleration of research on the world’s thousands of rice varieties so scientists can tap the vast reservoir of untapped knowledge they contain; and development of a new generation of rice scientists and researchers for the public and private sectors.

Threat of unrest

IRRI earlier warned of potential civil unrest as governments struggle to provide cheap rice amid a sustained rise in prices over the past two years to near-record levels.

“Longer term demand-supply imbalance is clearly indicated by depletion of stock that has been going on for years, the latest edition of the institute’s publication Rice Today quoted IRRI economist Sushil Pandey as saying.

“We have been consuming more than what we have been producing and research to increase rice productivity is needed to address this imbalance,” Pandey added.

Just 7 percent of the annual global production of the grain, a staple food of more than three billion people mostly living in the developing world, is traded in the international market. This apparently minimal trading, IRRI explained, stems from rice being seen as a political commodity and governments strive to maintain large stocks to guard against large price swings.

The institute said it had convened a group of experts to draw up a list of possible solutions to the crisis and they agreed that raising yields was the only long-term solution.

It added that the crisis was affecting both the urban poor as well as rice farmers who till small plots that cannot produce enough even for their own families’ use.

“Although the current rising rice price was seen as beneficial for farmers who grow a reasonable surplus that they can sell on the market, poor farmers with small or no surplus and poor urban consumers will continue to lose out if the price continues to rise,” the institute said.

Its head, Leo Sebastian, urged governments to increase investment in agricultural research.

“[The] impact of technologies is a driver of increased rice production, whether a country exports or imports,” he said.

“But everybody is saying that investment in agricultural research is small or limited—and something needs to be done about this,” Sebastian added.

The Philippines beefing up its supposedly precarious supply of rice, the Filipinos’ staple, through importations, according to government critics, is an “ostrich policy.”

Opposition calls for truth

Rather than continuing with sourcing rice from abroad, the spokesman of the United Opposition, lawyer Adel Tamano, on Friday asked the government to map out instead a long-term food security plan. He said the government is not telling the truth on the rice situation.

“The government’s claim that there is no rice crisis but only a price crisis is plain insensitivity to the plight of the masses. The net effect on the poor [of this claim] is the same since [the poor] don’t have enough money to buy rice. Then, even if there is technically no shortage, the poor will still end up hungry,” Tamano said.

He added that the government should apologize for failing to prevent rice hoarding, instead of offering “technical excuses.”

Another member of the political opposition, San Juan City Mayor Joseph Victor Ejercito, son of former President Joseph Estrada, said the rice shortage had been caused by “misgovernance.” Unlike his father, Ejercito added, President Gloria Arroyo has failed to give top priority to the agricultural sector.

Color-coding rice

Hoarding, according to House Speaker Prospero Nograles, could be curbed through “color-coding” of government and commercial rice. His idea is to put food coloring on both varieties to make it easier for consumers to differentiate them. Traders hoarding good-quality government rice, which they later pass off as commercial rice, will then be easily traceable, Nograles said.

Ensuring that the subsidized rice gets to its intended beneficiaries, the poor, can be realized through a “poverty map,” said Manila Rep. Trisha Bonoan-David. Such map, she said, will enable the government to pinpoint where the National Food Authority (NFA) rice that it subsidizes at more than P18 per kilo can be bought by those who can afford it least.

Imports arrive

The government, meanwhile, continues to import rice. Also on Friday, 395,000 bags of rice from Thailand, Vietnam, and other countries arrived at Subic Bay Freeport in Zambales province, north of Manila. This shipment brought to 1,828,186 the total number of bags that has been unloaded at the freeport since February this year.

Jaime Juan, Zambales provincial manager of the NFA, said the latest arrival will be for distribution to Region 2 and Region 3. It is part of the 2.1 million metric tons that the government plans to import this year, he added.

Rice and sugar imports valued at P25 million were confiscated by the Bureau of Customs also on Friday. Customs Commissioner Napoleon Morales said the items found inside container vans were seized after their owner failed to show a transport permit from the NFA.

Customs officials said the rice and sugar imports arrived at Port of Manila and Manila International Container Port on March 19 from Zamboanga City and Cagayan de Oro City.
— Ira Karen Apanay, Anthony Vargas, Anthony Bayarong, Sammy Martin and Jomar Canlas##

Call for urgent redressal of Asia’s “Rice price crisis
April 12th, 2008

Washington, April 12 (ANI): The International Rice Research Institute (IRRI) has called on the international community to start focusing on solutions to whats being described as a rice price crisis in Asia and elsewhere.

A regional meeting held by the institutes board of trustees in the Philippine city of Los Banos recently, looked at six key issues seen as vital to increasing rice production in Asia.

Increased production is needed to ease the sharp rise in rice prices that has swept across the region causing uncertainty and concern.

According to Professor Elizabeth Woods, the newly appointed chair of IRRIs Board of Trustees, IRRI and its partners solved similar rice production problems in Asia in the 1960s and 70s and we can do it again what we need is the committed support of donors and policy makers as well as better awareness among the media and general public of the problems we face, he added.

The Institute is calling for increased focus from both the public and private sectors – on the following six key areas:

First of all, an agronomic revolution in Asian rice production is needed to reduce existing yield gaps. Farmers have struggled to maximize the production potential of the rice varieties they are growing, so there is a gap between the potential yield and the actual yield. Thats the reason why farmers must improve their crop management skills so they can better deal with higher input prices.

Then, the delivery of new post-harvest technologies should be accelerated. Post harvest includes the storage, drying and processing of rice.

Another innovation that needs to be done is accelerating the introduction of higher yielding rice varieties.

Then, its also important to strengthen and upgrade the rice breeding and research pipelines, a prominent reason being that funding for the development of new rice varieties has steadily been reduced over the past decade or more.

Likewise, record high fertilizer prices and new pest outbreaks demand that rice crop and resource management research need urgent revitalization.

Also significant is accelerating research on the worlds thousands of rice varieties so scientists can tap the vast reservoir of untapped knowledge they contain.

Another vital concern for the Asian rice industry is the education and training of young scientists and researchers from each rice-producing country. Asia urgently needs to train a new generation of rice scientists and researchers before the present generation retires.

According to Professor Woods, The problems facing rice production in Asia are not unique to one country; they are shared by nearly all the rice consuming nations of Asia. We need to work together to find the right solutions. (ANI)##

White out: Asia”s rice price crisis
Friday, 11 April 2008

Although Asia”s farmers and exporters ought to be laughing all the way to the bank over the rapidly increasing price of rice, they aren”t. All sides – producers and consumers – are suffering and governments are struggling to cope, and farmers in Thailand, the Philippines and other countries are guarding their fields at night to prevent theft, according to internet source.

The price increases have forced rice-exporting countries to put the brakes on exports to keep domestic prices down and curb inflation. The rising price of rice is part of a global trend in rising food costs, with wheat leading the way, up more than 180 percent on the year, soybeans up 82 percent, soybean meal up 67 percent. But it is rice, with its fundamental place on the plates of Asia”s consumers, that is worrying governments. A year ago, rice was trading on the Chicago Board of Trade at $10.08. It has gone up to $20.175.

Philippine officials have been raiding rice warehouses near Manila where unscrupulous traders have been repackaging government-subsidized rice intended for poor areas and reselling it as high-grade commercial rice at twice the price. “Hoarding widens the gap in supply,”” Luz Lorenzo, an economist at ATR-Kim Eng Securities Inc. in Manila, told Bloomberg. “The raids will mitigate the problem. Hopefully, rising prices will encourage governments all over the world to boost production.””

Even in wealthy Korea, consumers went into a near panic in early March when the cost of ramen, an instant noodle made from wheat that is a staple of the Korean diet, spiked in price. Housewives emptied grocery shelves for days to snap up supplies before the increase went into effect.

Higher fuel costs, with crude soaring above US$100 a barrel and threatening to stay that way, have partly been blamed for making fertilizer more expensive, raising the cost of growing rice as well as increasing transport costs. In Southeast Asia, disease, pests and a 45-day unprecedented cold snap from China down all the way to Vietnam in January and February that hurt harvests has also been blamed. Flooding in the Philippines and Vietnam has also contributed to the growing crisis.
Part of the problem, however, has been caused by ill-advised government programs. Economically disastrous subsidized biofuel programs intended to ease global warming in the United States and Europe have caused a precipitous decline in the amount of agricultural lands planted for other food sources such as wheat and soybeans. Some 16 percent of US agricultural land formerly planted in soybeans and wheat is now being planted in corn, according to the US Department of Agriculture, most of it being used for biofuels. More corn – 86.7 million acres (35 million hectares) in 2008 – is being grown in the US today than at any time since World War II ended 63 years ago. A full 600,000 acres (242,800 hectares) more are in corn now now than in 2007. Given the heavy energy inputs that go into biofuel production, the Union of Concerned Scientists has warned that the production of the fuel itself, ethanol, may not help lessen climate change after all.

Low government rice stockpiles have also created an environment in which supply disruptions can result in rapid price swings. World rice stocks have shrunk from a peak of 130 million tonnes in 2000-2001 to 72 million tonnes in 2007-2008, according to US Department of Agriculture figures, the lowest level since 1983-84. That is estimated to meet only 17 percent of global consumption. Nearly half of the world”s 6.6 billion people are dependent on rice and are already eating more than is harvested yearly.

In order to curb rising domestic prices, the governments of Vietnam, India and Cambodia have taken steps to lower rice exports. Primarily because of rising food prices, including rice, consumer price indexes have soared upwards across the region, with unadjusted inflation in Singapore at its highest level in 25 years according to Lehman Brothers. In China it is at a 12-year peak, while Hong Kong and Taiwan are facing a 10-year high.

Vietnam reduced its rice exports by almost a quarter last week, ordering authorities to not sign any more rice export contracts and capping exports at 3.5 million tonnes for this year, down from 4.5 million in 2007. Prime Minister Nguyen Tan Dung was quoted in a government statement as saying the cut was to stabilize prices and curb inflation. Consumer prices rose by 20 percent in Vietnam in March, the highest in 12 years, with rice prices rising by 26 percent so far this year.

On the same day as Vietnam”s announcement, India raised the minimum sale price of rice exports by more than 50 percent. The move effectively ended overseas rice sales except for only the highest grades of rice. Tax incentives for non-basmati rice exporters were also scrapped. The move is also seen as an attempt to keep domestic prices down and combat inflation. India”s wholesale price inflation rose to a near 14-month high amid a slowdown in economic growth.

Cambodia, suffering from spiraling costs, also announced a two-month ban on rice exports last week. Prime Minister Hun Sen said on 26 March, “It”s a temporary measure. But it is to ensure food security.” In a country where a third of the population lives on less than US 50¢ a day, Cambodians are hurting from a doubling in the cost of cooking gas and a rise in the price of most staple goods.

Indonesia, traditionally a rice importing nation, is also reportedly considering a ban on exports to secure its domestic stocks. Although Indonesia expects a bumper crop this year, the increased output combined with a decline in domestic prices has raised fears of increased exports which could have an adverse impact on domestic stocks.

Thailand”s government has not, as yet, taken any moves to curb exports, although it is reportedly under consideration. For the moment, Thailand continues to maintain its exports while trying to keep domestic prices at acceptable levels. The Philippines has reportedly already bought 130,500 tonnes of Thai rice to shore up its stockpiles. Prime Minister Samak Sundaravej announced on March 27 that Indonesia wants to buy 100,000-300,000 tonnes of Thai rice annually.

Both Thai white rice and jasmine rice are expected to reach US$1,000 per tonne in the next three months. This is an almost doubling of the price of white rice, from US$556 per tonne and an increase from US$790 per tonne for jasmine rice. Thai rice merchants say prices have risen as much as US$20 per day.

Thailand has been the world”s leading rice exporter since the mid-1960s. The country exported a high of 9.55 million ton last year, earning US$3.6 billion. This year”s exports are expected to reach 8.75 million tonnes with earnings projected at US$4.7 billion.

Rising rice prices have governments worried about domestic supplies as farmers become increasingly interested in selling to the export market in order to make larger profits. Governments fear not having enough rice for local consumption and having to spend more on imports driving the price of rice up. Domestically it means that farmers are forced to sell at artificially low rates because they are denied export markets for their crop.

However, in an increasingly interconnected world where farmers and businessmen are well aware of international prices, they are much less willing to sell on the domestic market at prices that are often controlled by the government and are much lower than international rates. This has resulted in the kind of hoarding and speculation that Philippine authorities are trying to fight and that can subvert export bans.

Vietnamese rice harvests were down this year due to a cold snap in January and February in the north of the country that destroyed 100,000 hectares. The crop was also hit by the tungro virus and an infestation of the brown planthopper insect. Despite the bad harvest, Vietnam exported 859,000 tonnes of rice in the first three months of this year, which represents a 5.3 percent increase over last year. Expecting further price increases, Vietnam”s farmers and exporters have been stockpiling the grain, thus contributing to reduced supplies on the domestic market and raising prices at home.

The Indian government, while saying that there is no shortage in the country, is reportedly also concerned about domestic supplies amid fears of higher exports brought on by the scarcity on the global market. India was thought to possibly surpass Vietnam as the second largest rice exporter in the world this year.

Indonesia and the Philippines are concerned over domestic rice stocks. Indonesia worries that higher international prices will see its farmers and businessmen sell more rice overseas resulting in less for the local market.

In the Philippines, where there is not enough arable land to grow enough rice to feed its population, rice stocks are already low. Government officials have requested that the public save leftover rice and have even requested that fast food restaurants reduce the portion of rice sold with meals. President Gloria Macapagal Arroyo has arranged a 1.5 million tonne purchase of rice from Vietnam, and she has also ordered the crackdown on hoarding, price manipulation on profiteering from government subsidized rice as soaring prices undermine her already-shaky hold on government and declining popularity.

Thailand is trying to keep domestic prices down through government distribution from its own stocks. Thailand”s Commerce Minister announced that 300,000 tonnes of white rice stocks will be given through bidding to millers this week in an attempt to limit an increase in domestic prices. The rice is from a 2.1 million-tonne stockpile from the 2004-2006 harvests. Rice from the program will be sold 40 percent lower than the current price. Bids from millers will be accepted only if they pack the rice in 5 kilogram bags for the domestic market. Thailand”s government stockpile is estimated to be good for only three months, then it will have to buy on the local market to replenish stocks.

While this move may appease consumers, Thailand”s rice producers are not happy with the government”s current cap on domestic prices. The Thai Rice Packer”s Association has demanded that the Ministry of Commerce increase the retail price of rice by 10 percent in April. The association claims the step is necessary due to increasing production costs.

The volatile rice prices have not been a boon to exporters. The common practice is for rice exporters to sell forward at fixed prices and then buy rice on the common market to meet orders. This has resulted in problems across the region as rapidly rising prices leave exporters losing money due to having to buy rice at prices that are much higher than what their export contracts were agreed for when signed several months ago. Exporters who insist on the previous price are finding it difficult to source enough rice to meet orders, forcing delays or even defaults on orders.

For Vietnamese exporters, the problem is compounded because their contracts were signed in dollars. They are now having difficulty filling orders due to farmers hoarding in expectation of further price increases, while their profits are shrinking as the falling dollar makes their contracts worth less than when signed months ago.

Thailand”s exporters have the same trouble. Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said last week, “There will be a lot of defaults coming up because we cannot find rice on the market.” Indonesia and Iran are expected to want orders for 1.5 million and 1 million tonnes of rice respectively filled in the next three to four months, but exporters are unsure of their ability to meet the demand. The default on international orders could cause up to $5 billion worth of damages.##

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