April 7, 2008
A global rice shortage that has seen prices of one of the world’s most important staple foods increase by 50 per cent in the past two weeks alone is triggering an international crisis, with countries banning export and threatening serious punishment for hoarders.
With rice stocks at their lowest for 30 years, prices of the grain rose more than 10 per cent on Friday to record highs and are expected to soar further in the coming months. Already China, India, Egypt, Vietnam and Cambodia have imposed tariffs or export bans, as it has become clear that world production of rice this year will decline in real terms by 3.5 per cent. The impact will be felt most keenly by the world’s poorest populations, who have become increasingly dependent on the crop as the prices of other grains have become too costly.
Rice is the staple food for more than half the world’s population. This is the second year running in which production – which increased in real terms last year – has failed to keep pace with population growth. The harvest has also been hit by drought, particularly in China and Australia, forcing producers to hoard their crops to satisfy local markets.
The increase in rice prices – which some believe could increase by a further 40 per cent in coming months – has matched sharp inflation in other key food products. But with rice relied on by some eight billion people, the impact of a prolonged rice crisis for the world’s poor – a large part of whose available income is spent on food – threatens to be devastating.
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