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SINGAPORE—Rice
climbed to a record and corn traded near its highest
ever on speculation food demand will outstrip supply as
governments curb exports to prevent unrest.
Soybeans
advanced for the third day and wheat gained as investors
bought agricultural commodities on concern abnormal
weather may curtail production and push down global
inventories of grains that are already at their lowest
for at least 26 years. Rice jumped 2.4 percent in
Chicago.
The
World Bank estimates “that 33 countries around the world
face potential social unrest because of the acute hike
in food and energy prices,” Robert Zoellick, the bank’s
president, said. For these countries “there is no margin
for survival.”
Record
food and fuel prices are stoking global inflation and
forcing governments from China to India to take measures
to protect supplies. Rice, the staple food for about 3
billion people worldwide, has doubled in the past year,
and crude oil, soybeans and wheat reached their highest
ever.
Rough
rice for May delivery advanced to $20.26 per 100 pounds
on the Chicago Board of Trade Thursday as the Food and
Agriculture Organization said global exports would drop
3.5 percent this year as nations curb sales.
“The
international rice market is currently facing a
particularly difficult situation with demand
outstripping supply and substantial price increases,”
said Concepcion Calpe, a senior economist at the FAO.
Commodity prices are posting their seventh year of
gains. The UBS Bloomberg Constant Maturity Commodity
index of 26 raw materials more than tripled in the past
six years as global demand, led by China, outpaced
supplies of metals and crops. The Standard & Poor’s 500
index of stocks gained about 20 percent.
“As
financial markets have tumbled, food prices have
soared,” Zoellick said in a speech Wednesday posted on
the bank’s web site. Since 2005 “the prices of staples
have jumped 80 percent,” he said.
Corn for
May delivery gained as much as 0.5 percent to $5.9875 a
bushel. The commodity rose to a record $5.9925 a bushel
Wednesday on concern that rains in the US, the world’s
largest producer and exporter of the crop, will delay
planting.
“We’re
looking at very strong fundamentals for corn,” Kazuhiko
Saito, a strategist at Interes Capital Management, said
in a telephone interview from Tokyo Thursday. “The
possibility of delayed planting in the US is adding to
the bullishness.”
Indonesia,
the world’s third-largest rice producer, may join China,
India, Vietnam and Egypt in curbing exports to secure
domestic supplies, Agriculture Minister Anton
Apriyantono said Wednesday in a text message to
Bloomberg News.
The
world’s poor “are living very close to the edge as it
is,’” said Robert Zeigler, director general of the
International Rice Research Institute in the
Philippines. “If they are pushed further, they are
typically the first who will spark unrest.”
Consumer
prices in China rose 8.7 percent in February, an 11-year
high, and reached a 13-month peak in
India.
Chinese food prices, based on a government index, jumped
28 percent in February, the most since July.
The
United Nations warned in February that 36 countries,
including China, face food emergencies this year, as
stockpiles of grains such as rice drop to a 26-year low.
The
Vietnam Food Association has asked its members to stop
signing new rice-export contracts between April and
June, following Prime Minister Nguyen Tan Dung’s
directive to cut delivery of the grain overseas.
Vietnam,
one of the world’s three biggest rice exporters, will
reduce shipments this year to 4 million tons to ensure
supplies domestically and curb inflation that’s at its
highest in more than a decade. The government also said
it’s considering a tax for rice exports.
Malaysia
plans to step up efforts to import rice from other
Southeast Asian nations to build reserves. The
Philippines is buying the grain from an emergency
regional stockpile and taking additional supplies from
the US. (Bloomberg) |
