The cost of rice is expected to climb over the coming
months, as an improving global economy raises demand, and drought cuts
production in countries such as India. Ron Corben reports from Bangkok.
Some economists say prices for rice, the staple food for much of the
world's population, could be returning to levels that sparked inflation fears
in much of Asia last year.
Charuk Singhapreecha is deputy dean of the faculty of economics at Thailand's
Kasetsart University. He says prices - especially for Thai rice - are being
pushed higher by new customers coming into the market after the economic
slowdown of the past year.
/// CHARUK ACT ///
"They expect that the world demand will increase and we expect that the
price of rice will increase next year. There are many new markets for the Thai
rice and also we still have for our old customer - China, some Arab countries -
they will increase the demand."
/// END ACT ///
Prices on the global market could again near the record above $1,000 a ton set
in the middle of 2008. This month, export prices for Southeast Asian rice have
jumped from about $550 a ton or less to more than $650.
Vichai Sriprasert, honorary president of the Thai Rice Exporters Association,
says further weakness in the U.S. dollar and concerns over drought in India add
to pressure on prices.
/// VICHAI ACT 1 ///
"The dollar weakness contributes to this; the rumors about weather
conditions in India, in China, Australia, elsewhere, are also contributing. The
dollar will continue to be weaker and weaker - if this turns out to be true
other commodities, rice, oil, gold will all go up in price."
/// END ACT ///
Market experts say next year India is likely to try to import three million
tons of rice - tapping the world market for the first time in 21 years -
because of a drought.
Vichai also warns that increasing demand for bio-fuels from grain could reduce
food crops, forcing the price of food grains higher.
Officials from Vietnam, a leading export competitor with Thailand, predict
prices will reach about $800 dollars a ton by the middle of 2010. This week the
Philippines' National Food Authority offered almost $665 dollars a ton for
600,000 tons of Vietnamese rice.
Economists say higher food prices will only increase the problems faced by the
region's poor, who are highly dependent on rice as a staple food.
Click on our audio files for Lao translation of this report.