North by Northwest

I was surprised to find out that The Philippines is the largest importer of rice in the world. However, there is a problem because global supplies of rice are currently shrinking as the governments of some rice exporting countries, such as Egypt, India, Vietnam and Cambodia, have decided it is in the interest of their citizens to ban or restrict the export of the grain to keep the prices lower at home.

Conversely, many US farm aid programs are in place to keep the prices of crops and related food products, like sugar, high at home to help farmers at the expense of the consumer.

Unfortunately, neither of these types trade incentives is good for the average person. In the US, we overpay for sugar or substitute corn-syrup as an alternative to support corn production over sugar production. Meanwhile Egyptian and Indian rice growers will be hurt by the lower prices of their crops because the demand is domestic-only which in turn causes consumers in rice importing countries, such as the Philippines, to pay much more for rice than they would otherwise.

Fortunately, there are some rice reserves in Vietnam and Thailand.

To a lot of people, the price of rice is a big deal:

Rice prices jumped 30 per cent to an all-time high on Thursday, raising fears of fresh outbreaks of social unrest across Asia where the grain is a staple food for more than 2.5bn people.

These foreign sales restrictions have removed about a third of the rice traded in the international market.

“I have no idea how importing countries will get rice,” said Chookiat Ophaswongse, president of the Thai Rice Exporters Association. He forecast that prices would rise further.

Rice is also a staple in Africa, particularly for small countries such as Cameroon, Burkina Faso and Senegal that have already suffered social unrest because of high food prices.

Thai rice, a global benchmark, was quoted on Thursday at $760 a tonne, up about 30 per cent from the previous daily quote of about $580 a tonne, according to Reuters data. Some traders, however, said the daily jump was not as steep, adding that Thai rice had already traded at about $700 a tonne this week.

Rice prices have doubled since January, when the grain traded at about $380 a tonne, boosted by strong Asian, Middle Eastern and African demand.

Something to think about the next time you have a plate of combination stir-fried rice.

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