Kamal Nath, India’s trade minister, said the government would crack down on hoarding of essential commodities to keep a lid on food prices. “We will not hesitate to take the strongest possible measures, including using some of the legal provisions that we have against hoarding,’’ he said on Friday.
Thai medium-quality rice, a global benchmark, traded at about $850 a tonne on Friday, up from $760 a tonne last week, while the price of less representative top-quality aromatic rice broke the $1,000-a-tonne level for the first time, traders said. They added that the grain was being sold to African destinations.
In Chicago, US rice futures hit an all-time high of $20.45 per 100 pounds.
Although only a small amount of the grain is traded internationally, the rise in Thai prices signals the trend for the global market and also for domestic prices in countries where local production is enough to meet demand.
The price jump came as leading exporting countries, including Vietnam, India, China and Egypt, banned foreign sales. Hanoi extended its ban for two extra months until June.
Food aid officials said consumption could rise further because record food prices are forcing families to move from a diversified diet to just one staple.
Farmers delaying their harvest and middleman hoarding stocks are also contributing to the crisis, said governments and traders.
In the past weeks, traders and diplomats have warned that many West African countries, where rice is a staple, had yet to purchase the grain this year, leaving them subject to record prices now.
Toga McIntosh, Liberia’s minister of economic affairs, said earlier this week that rice was “always on the table” in his country. “We are very dependent on imports.”
Nigeria, Senegal and Ivory Coast are also among the world’s top 10 rice importers.
Some countries postponed their imports earlier this year when prices started to climb, in the hope that the increase was a short-term anomaly, but now these countries are buying, traders said. Rice-importing countries are responding to the price surge by slashing custom duties and reforming their purchase systems to secure the grain.
The Philippines, the world’s largest buyer of rice, on Friday said it was doubling the import quota allotted to private traders to 600,000 tonnes in a bid to boost rapidly dwindling rice stocks after the government failed to attract enough offers in the past three tenders.
Copyright The Financial Times Limited 2008