U.S., Japan Working to Ease Shortage of Food
The Washington Times reports on moves to release Japanese rice stocks, citing a CGD Note by rice expert Tom Slayton and CGD Non-Resident Fellow Peter Timmer.
From the article:
"Releasing this rice to global markets would prick a speculative bubble and bring rice prices down fast, while also encouraging China and Thailand to release their surplus stocks," said Tom Slayton of the Center for Global Development.
"Failure to act would mean that high-quality U.S. rice would be fed to Japanese pigs and chickens while millions of poor people suffer from hunger and malnutrition."
Mr. Slayton said Japan should be able to cover its costs and sell the rice for about $600 a ton-and-a-half the recent export price of rice. Or it could donate the rice to the World Food Program, which has need of more than a half-million tons of rice donations.
Japan's move would be seen as a "grand gesture" that in one stroke would solve the world's rice crisis, Mr. Slayton said.
The rice crisis that emerged suddenly this year was largely due to panic and hoarding created by political and psychological conditions in Asian countries where stockpiles of the critical staple have grown thin, Mr. Slayton maintained in a paper co-authored with Stanford University professor Peter Timmer.
While rice prices had been increasing along with consumption for years, the sudden, extreme spike in prices since January was due to a chain of events that started with the imposition of rice-export restrictions by India, Thailand and Vietnam, which along with the U.S. are the top four exporters of rice worldwide.
The moves by top exporters to hoard stockpiles triggered a panic in importing countries like the Philippines to secure supplies - at any price - to ensure they had enough to eat, Mr. Slayton said.
Politics entered into it because many of the countries seeking to protect their rice supplies were facing elections in which any rice shortages would have hurt the prospects of the regime in power, he said.
"The inevitable result of such hoarding is a spiral in rice prices, the very thing that all market participants had feared," he said. "An agreement by Washington and Tokyo for Japan to release its 1.5 million tons of unwanted rice stocks is the key to piercing this bubble."