The Philippine-based International Rice Research Institute (IRRI) has warned that the price of rice will continue to surge because demand surpasses supply. According to sources, rice prices have hiked up by 70 percent in the past year with more price increases happening in recent weeks.
In Asia, rice producing countries that include India, China, Indonesia, and Vietnam have already started implementing restrictions on rice exports.
“Longer term demand-supply imbalance is clearly indicated by depletion of stock that has been going on for several years,” said Sushil Pandey, an agricultural economist at the IRRI told the BBC.
She added, “We have been consuming more than what we have been producing and research to increase rice productivity is needed to address this imbalance.”
IRRI explained that a number of factors led to the increase in rice prices: land previously used for producing rice being converted for industrial and urban uses, Asia’s burgeoning urban middle class most notably in India and China with an increased demand for the grain, and decreased rice production due to extreme weather conditions in Indonesia, Bangladesh, Vietnam and China. Other sources also cite the strain of rice cartels that have been hoarding the grain to exploit the market once prices increase.
According to the BBC, Chinese Prime Minister Wen Jiabao said that the country has an “abundant” supply of rice to feed its population of 1.3 billion. He added that their stockpile alone keeps about 40-50 million tons of rice.
Basic crop prices have also not been spared of price hikes. The World Bank reports that the price of wheat, rice and corn have increased leading to overall food prices being up by 83 percent in the past three years.
In China food prices have reached its 12-year peak leading to general inflation pegged at a 10-year high as well.
Asia produces 90 percent of the world rice supplies where it is also the staple food of more than three billion people. The top rice producing countries in world are: China, India, Indonesia, Bangladesh, Vietnam, Thailand, Myanmar, Japan, Philippines, and Brazil.
