UN: Global rice prices set to fall but food prices will remain high for years to come; millions more could go hungry

AP / May 22, 2008

Rome—World rice prices that have tripled in Asia over the course of the year may come down but overall food prices will remain high for years to come, leaving millions more hungry, a U.N. food agency warned Thursday.

High oil prices, growing demand, flawed trade policies, panic buying and speculation have sent food prices soaring worldwide, trigging protests from Africa to Asia and raising fears that millions more suffer malnutrition.

On Thursday, tens of thousands of workers in Senegal — from teachers to tax officials, fishery and port workers — stayed home as part of a strike staged by unions to protest the spiraling cost of rice, fuel and other basic goods.

Surging food prices have also sparked riots in Haiti and fed worries about supplies in the Philippines.

The Food and Agriculture Organization said it had some good news: The world prices of most agriculture commodities have started to drop.

The bad news: The prices are unlikely to fall back to pre-2007 levels, the agency said in a report Thursday.

“We are facing the risk that the number of hungry will increase by many more millions of people,” said Hafez Ghanem, assistant director-general of the FAO.

Conditions on the global rice market could ease as new crops are harvested around the world. But price pressures will remain high until at least October or November, when the bulk of this year’s paddy crops reach the market, the report said.

“Stock levels are low and you need several good seasons to replenish them,” Ghanem said. “There will be some improvement, but we don’t expect a major change.”

Internationally, rice prices skyrocketed by about 76 percent from December to April while overall food prices have risen 83 percent in three years, according to the World Bank.

In Asia, rice prices have tripled this year, with the regional benchmark hitting $1,038 a ton Wednesday for Thai 100 percent grade B white rice.

The FAO said the price pressure could ease further if producing countries such as India relax export restrictions on rice.

Recent natural disasters such as the cyclone in Myanmar and the earthquake in China are likely to have a domestic impact, rather than on international markets, FAO experts said.
In Geneva, the U.N. Human Rights Council debated a Cuban resolution expressing “grave concern at the worsening of the world food crisis.”

The resolution, co-signed by most members of the 47-nation council, said nations “have a primary obligation to make their best efforts to meet the vital food needs of their population.”
The international community, meanwhile, must provide poorer nations with food aid and assistance so that farmers can increase food production and improve “food crop rehabilitation,” the draft resolution says.

In Japan, a government official announced Thursday that his nation would release some of its huge stockpile of rice to help ease the crisis, sending some 20,000 tons to five African nations in coming weeks.

That step is part of a $50 million emergency food aid plan to be endorsed by Japan’s Cabinet on Friday, said Shigeru Kondo, a Foreign Ministry aid official.

The total aid package — which includes grains, beans and other foods in addition to rice — will be distributed in 12 countries, including Afghanistan, by international relief agencies such as the World Food Program.

Thailand’s prime minister assured the Philippines during a visit there Thursday that his government was willing to increase Manila’s rice inventories, an official said.

The FAO is forecasting an increase of 3.8 percent in this year’s cereal production compared with last year, assuming favorable weather. Tight wheat supply is likely to improve the most, the agency said. Global milk, sugar and meat production are also expected to grow.

Recently, FAO said rice production is expected to hit a new record of 666 million tons worldwide, a global increase of 2.3 percent.

Production in Asia is forecast to rise to 605 million tons from 600 million tons, with particularly large increases in Bangladesh, China, the Philippines, Thailand and Vietnam, the agency has said.
African production is forecast to grow nearly 4 percent to 23.2 million tons and in Latin America by 7.4 percent to 26 million tons, while production is expected to be down in Australia, the United States and Europe.

Associated Press writers Bradley S. Klapper in Geneva, Switzerland, and Sadibou Marone in Senegal, Dakar, contributed to this report

error: Content is protected !!