MANILA (Reuters) - Galloping world rice prices should start to calm in the next month as fresh crops hit markets, but they will not return to 2007 levels anytime soon due to soaring production costs and rising demand, a top expert said.
By Carmel Crimmins
MANILA (Reuters) - Galloping world rice prices should start to calm in the next month as fresh crops hit markets, but they will not return to 2007 levels anytime soon due to soaring production costs and rising demand, a top expert said.
Consumers from Bangkok to Tehran have been experiencing the worst leaps in the food staple's price since the early 1970s, when OPEC's oil squeeze sent rice prices shooting up to $1,300-1,400 a tonne, in inflation-adjusted terms.
Thai 100 percent B grade white rice, considered the world's benchmark, is around $950 per tonne, triple its price at the start of 2007, as major exporting nations curb shipments to keep a lid on domestic inflation and importers scour for supply.
!ADVERTISEMENT!"My guess would be we will start to see it stabilize in another month or so," Robert Zeigler, director general of the Philippines-based International Rice Research Institute (IRRI), told Reuters in a telephone interview on Friday.
"We will hit a peak and it will drop pretty quickly but not anywhere near $300 a tonne."
At the time of the 1970s crunch, IRRI came to the rescue with the Green Revolution: the development of high-yielding rice seeds that multiplied harvests of Asia's food staple and enabled major producers such as China, India and Thailand to industrialize.
To achieve a second breakthrough, Zeigler warned urgent action was needed by governments and international agencies to boost rice yields and improve poor people's access to a grain that feeds half the planet's 6.6 billion strong population.
MARKET FORCES NOT ENOUGH
"There is a period over the next 5 or 10 years where governments are going to have to pay much closer attention to the food supply and the needs of the poor and the working people," he said.
"The market (alone) is not going to provide a solution that is acceptable."
In a background paper released to Reuters, IRRI's scientists listed the measures they think need to be taken to deal with soaring prices and hoarding by producer nations which have sparked food riots in Bangladesh and helped topple Haiti's government.
With little scope to expand paddy fields as cities, factories and biofuel plantations gobble up land, Zeigler said rice yields, which have been plateauing, need to be bolstered through improving crop management, post-harvest technologies and introduction of new rice varieties.
"If the farmers who are getting 3.5 tonnes (per hectare) today used good seeds and managed their fertilizer and water properly they could get 4.5 tonnes next season."
Zeigler said a few billion dollars would go a long way towards improving global food security through investment in agricultural systems and research and development.
"One stealth bomber, B2, costs $1.2 billion. It's still pocket change when you consider that political stability, social stability and therefore economic growth depend on having an adequate food supply for the poor and the working people."
"It's not a huge amount."
He also pointed to dismantling the recent rash of beggar-thy-neighbor trade barriers for rice and introducing safety net policies to ensure that poor people, who spend up to 40 percent of their income on rice, get what they need.
"Let's change the focus from, 'Oh we have a problem and chase the ambulance,' to 'lets buckle down and get to work and get the solution'."
(Reporting by Carmel Crimmins; Editing by Jerry Norton)
