SINGAPORE: Rice export prices will probably be sustained at about $600 per metric tonne after drought and floods damaged crops in India and the
Philippines, said an agricultural economist. Rice futures rallied in Chicago. “It is safe to say the rice price is not going back to $300 per tonne any time soon and is likely to remain around $600 in the near term,” Samarendu Mohanty, a senior economist at the International Rice Research Institute, said in a report to be published on Monday, without citing a definite time frame.
The Asian rice price benchmark jumped to $607 per tonne in Thailand last week from 2009’s low of $525 as the Philippines, the world’s biggest importer, advanced purchases and on concern India may become a net importer after a drought parched crops last year. The grain has averaged $616 since December 2, according to Bloomberg data. Higher costs for the staple for half the world’s population may push more people in least developed nations into hunger and some Asian governments may be forced to subsidise rice, widening their budget deficits, Frederic Neumann, senior Asia economist at HSBC Holdings, said by phone from Hong Kong.
“One thing we saw in 2008 is that a gradual increase may well turn into a sudden spike and this could lead to political challenges further down the road,” he said. Rice rose to a record in Chicago in April 2008 and the Asian benchmark export prices jumped to their highest level ever a month later, after India and other exporting countries curbed shipments, adding to concerns of shortages that sparked riots from Haiti to Egypt.
The Philippines may need to buy between 500,000 and 1 million tonne overseas, adding to purchases from tenders last quarter, the US Rice Producers’ Association said in a report published on January 8. State- run National Food Authority purchased about 2.2 million tonne of overseas supplies in the tenders for delivery this year, spokesperson Rex Estoperez said last week. Rice futures in Chicago have jumped 34% from last year’s low of $11.195 per £100. The March-delivery contract rose for the first time in five sessions, gaining as much as 1% to $15.10 in after-hours trading in Chicago, reversing a 0.5% loss earlier.
Futures may rise to $16 per £100 in the next three months, as the Philippines remains in the import market, Peter McGuire, managing director at CWA Global Markets, said by phone from Sydney on Monday. Global rice stockpiles are forecast to decline 2.7% to 121.1 million tonne at the end of the 2009-2010 season because of smaller crops in countries including India, the Philippines, Iraq, Nepal, and Pakistan, the UN Food and Agriculture Organisation said last month.
The Rice price is higher and higher but the backbones of the Nation like the farmers still very poor and earn little money from farming unlike to those Merchants
