Asia limits rice exports as prices and uncertainty rise

Top exporters are trading less of the staple food, hurting countries that rely on imports.

Asia, home to many of the world's top rice suppliers, accounts for 76 percent of the 30 million tons of the staple food exported each year. Prices are shooting up worldwide, in part because many of those countries have cut back on exports due to fears of shortage. The food-price crisis has underscored that, as a region, Asia is divided into "rice haves" – where domestic production is enough to feed the population – and "rice have-nots," which consistently rely on imports. Correspondent David Montero provides a snapshot of rice supplies around the region:

HAVES

Thailand

Thailand is the world's largest exporter of rice, with 31 percent of the global market. In 2007, it exported 9.4 million tons of rice, out of a total 20 million tons produced. Unlike many Asian countries, it has not imposed any export restrictions, and this year it expects to export between 8.75 million and 9 million tons.

Yet prices of rice have doubled in the country since the beginning of the year, fueling fears of inflation and hoarding. But the government has stockpiled 2.1 million tons of rice, and no shortages are expected.

Vietnam

Vietnam is the second largest exporter of rice in the world, with about 20 percent of the global market. It has said it will limit exports of rice to 3.5 million tons, down from 4.5 tons last year. The announcement contributed to global prices of rice doubling since January. Consumer prices in Vietnam, meanwhile, increased by 20 percent in March, a 12-year record.

India

India exports about 4 million tons of rice a year, making it the world's third-largest exporter. But because food prices have risen by 8.3 percent in the past year, it has also imposed restrictions on exports of rice. That is putting a considerable strain on world prices and supplies, experts say.

Pakistan

Pakistan exported 3.3 million tons of rice last year, making it the fifth-largest exporter just behind the United States. But exports this year are expected to fall by 15 percent to 2.8 million, mainly due to power shortages, according to Pakistani officials.

Since rice is not a staple food in Pakistan – wheat is – the government has not placed the same kind of restrictions as other Asia countries. With rice in tight supply, many countries are pinning their hopes on Pakistan's exports.

China

China is the world's largest producer and consumer of rice, with annual supplies large enough to feed its population. It exported 1.4 million tons of rice last year. But food prices jumped 21 percent in March alone, and consumer prices reached an 11-year high in February of 8.7 percent. To dampen price increases, China imposed strict export restrictions on rice, which is expected to result in a drop of 300,000 tons to the global market. This week it also imposed a six-month tariff on fertilizer exports, to help shore up domestic supply.

Cambodia

Cambodia produced 3.6 million tons of rice last year, according to official estimates. Two million are needed for domestic consumption, leaving Cambodia with about 1.6 million tons in surplus. Last year it exported 450,000 tons of rice, according to the US Department of Agriculture. But this year it may not: In late March, Prime Minister Hun Sen imposed a two-month ban on all exports, hoping to curb the spiraling domestic price of rice. The rate of food inflation reached 24 percent in March, the highest level in a decade.

Indonesia

Indonesia, one of the world's leading consumers of rice, usually imports large quantities of the grain to feed its 233 million people – making it particularly vulnerable to the rice crisis. But this year it expects to harvest 32.6 million tons, about 1.2 million more than it needs for domestic consumption. The surplus comes thanks to an expansion in the harvested farmland area and improved yields. Accordingly, rice prices have only increased by 7 percent this year, much less than in the rest of Asia, which has seen a rise of about 50 percent.

Japan

Unlike the rest of Asia, there is actually a rice glut in Japan, and rice prices are falling, according to the Wall Street Journal. Last year, Japanese farmers produced 8.71 million tons of rice, against a demand of 8.33 million tons. Japanese consumers pay two to three times more for rice than other Asian consumers do, as part of a program to generously subsidize rice production.

South Korea

South Korea looks prepared to weather the current crisis. Last year it produced 4.68 million tons of rice, more than enough to meet the 4.16 million tons of demand. Still, rice prices have shot up 75 percent in the past two months.

Australia

Australia used to produce 700,000 tons of rice and export around 600,000 annually, contributing 2 to 3 percent of the world's rice trade. But six years of drought, which has not been offset by added spending on irrigation, have shrunk the rice industry by 98 percent. Australia expects to have its lowest output since rice production began in the country in the 1920s.

HAVE-NOTS

North Korea

North Korea may be among the countries hardest hit by the rice crisis. Severe flooding last year wiped out about 11 percent of the country's crops, creating what observers say is the country's worst food crisis since a famine in the 1990s, in which as many as 2 million people died.

North Korea usually relies on rice imports from China, but those are likely to be limited because of China's new export restriction. South Korea has annually exported 400,000 tons of rice to the North, but that arrangement has come under threat as relations between the North and South have faltered over Pyongyang's nuclear proliferation.

The Philippines

The world's largest importer of rice, this nation imported 1.9 million tons of rice in 2007 and this year expects to import 2.7 million tons – a 42 percent increase. The price of rice has risen 30 percent in the country since January. In response, the government has flooded markets with subsidized rice, banned conversion of farmland for development, threatened rice hoarders with life imprisonment, and announced a $1 billion rice production package .

Malaysia

Malaysia produces two-thirds of the rice needed to feed its population of 27 million and imports the rest from neighbors. But Vietnam and Cambodia have imposed export restrictions, and some analysts worry the government has not ensured an adequate rice stockpile.

The ruling party did poorly in March elections, with voters citing food prices among their greatest concerns. Last week the government announced a $1.3 billion plan to ensure self-sufficiency in rice production.

Bangladesh

Bangladesh produces about 28 million tons of rice a year, but it is not enough to feed the country's 140 million people. Inclement weather such as last November's cyclone Sidr damaged many crops. The country now faces acute shortages. On Saturday it put out a bid for 50,000 tons of rice to stabilize emergency stocks after last week's bid for 25,000 tons went unanswered.

Officials say that they have imported about 3 million tons of rice and wheat for the current fiscal year and hope to import 4 million tons total before it ends in June. Hoarding has been a problem, and food prices have doubled in the past year, leading to riots in the capital, Dhaka, last week.

Sri Lanka

Sri Lanka produces about 3.3 million tons of rice a year, which makes it nearly self-sufficient in rice. But heavy rains and flooding last year wiped out about 2.5 percent of the yield, according to the United Nations Office of Humanitarian Affairs.

Sri Lanka is hoping to import 200,000 tons of rice from India, Pakistan and Burma (Myanmar).

You've read  of  free articles. Subscribe to continue.
QR Code to Asia limits rice exports as prices and uncertainty rise
Read this article in
https://www.csmonitor.com/World/Asia-Pacific/2008/0422/p12s01-woap.html
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe