Friday, March 28, 2008

Rice - a Staple of Social Upheaval?

Rice may be emerging as the trigger for widespread social unrest across Asia.

As demand surges, prices have doubled in the last five years and reserve stocks have fallen to their lowest levels for thirty years.

In response to this trend, a number of Asian countries have imposed export bans on their own supplies of rice, a move likely to further raise prices in the rice-importing countries.

Recent developments include:
  • protests in Indonesia's capital Jakata over the rising cost of rice
  • an export ban on Cambodia's rice supply
  • a 22% reduction in rice exports from Vietnam
  • an increased export tax on rice from India - from $500 to $650 per tonne
Meanwhile, the government of the Philippines (the world's largest rice importer) has also asked Vietnam recently to guarantee its own supply of rice among concerns about the former's ability to feed its population, which now stands at nearly 90 million.

The Philippine government has been widely criticized for not ensuring sufficient home-grown supplies of rice over the years as consumers now face major price rises on this staple product.

Meanwhile, China, the world's biggest rice producer, has announced plans to increase the subsidy paid to rice (and wheat) framers in an attempt to boost production and stabilize prices. China's rice crop is almost entirely used in its domestic market.

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