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U.N.: World rice prices may begin to drop

Soaring world rice prices may begin to drop amid excellent production prospects this year, but overall food prices that have set off protests around the world are likely to remain high.
/ Source: The Associated Press

Soaring world rice prices may begin to drop amid excellent production prospects this year, but overall food prices that have set off protests around the world are likely to remain high, a U.N. food agency said Thursday.

Global rice market conditions could ease as new crops are harvested around the world, said the Rome-based Food and Agriculture Organization. However, price pressure will remain high at least until October or November, when the bulk of this year’s paddy crops will reach the market.

“One thing is to say prices will come down, which is already happening for many products,” Abdolreza Abbassian, an FAO economist, said during the presentation of the agency’s Food Outlook report. “Another is to say they will be low. No, they won’t be low.”

Escalating food prices have triggered protests around the world in recent months. The United Nations has blamed a range of factors — high oil prices, growing demand, bad trade policies, bad weather, panic buying and speculation.

In Geneva, the U.N. Human Rights Council met to debate a resolution drafted by Cuba expressing “grave concern at the worsening of the world food crisis,” and urging countries to ensure that everyone is free from hunger.

The resolution, which is co-signed by most members of the 47-nation council, says “states have a primary obligation to make their best efforts to meet the vital food needs of their population.”

It says the international community, meanwhile, should provide poorer nations with food aid and assistance so that they can increase food production and improve “food crop rehabilitation.”

Rice prices skyrocketed by about 76 percent from December to April, experts say. Rice prices have remained high in Asia, though they have fallen back about 20 percent in the U.S. over the last month. Thai 100 percent grade B white rice, a regional benchmark, has tripled this year and reached $1,038 a ton Wednesday.

The FAO said the price pressure would ease further if producing countries, such as India, would relax export restrictions on rice.

In Japan, a government official announced Thursday that his nation would release some of its huge stockpile of rice to help ease the crisis, sending some 20,000 tons to five African nations in coming weeks.

That step is part of a US$50 million (euro32 million) emergency food aid plan to be endorsed by Japan’s Cabinet on Friday, said Shigeru Kondo, a Foreign Ministry aid official.

The total aid package — which includes grains, beans and other foods in addition to rice — will be distributed in 12 countries, including Afghanistan, by international relief agencies such as the World Food Program.

And Thailand’s prime minister assured the Philippines during a visit there on Thursday that his government was willing to increase Manila’s rice inventories, an official said.

Despite good production prospects, the FAO said food prices were unlikely to fall back to pre-2007 levels, despite good production prospects.

“Stock levels are low and you need several good seasons to replenish them,” said Hafez Ghanem, FAO assistant director-general. “There will be some improvement but we don’t expect a major change.”

In its report, the agency said this year’s cereal production is forecast to increase by 3.8 percent compared with last year, assuming favorable weather. Tight wheat supply is likely to improve the most, it said.

Recently, FAO said rice production is expected to hit a new record of 666 million tons worldwide, a global increase of 2.3 percent.

Production in Asia is forecast to rise to 605 million tons from 600 million tons, with particularly large increases in Bangladesh, China, the Philippines, Thailand and Vietnam, the FAO has said.

African production is forecast to grow nearly 4 percent to 23.2 million tons and in Latin America by 7.4 percent to 26 million tons, while production is expected to be down in Australia, the United States and Europe.