I wrote in a CGD Note last week with Tom Slayton about how the Philippines are engaging in aggressive buying techniques that seem designed to drive up prices, raising the specter of another rice price crisis such as what befell us in early 2008. When more than 3 billion people—more than half of whom are very poor—depend on rice for their daily diet, a repeat of 2008 would put many in danger.
Earlier this year, with the food crisis in the daily headlines, the world's leaders made promises -- first in Rome at an FAO gathering in June and then at the G-8 summit in Japan the following month -- to make a concerted effort to provide relief for the world's poor.
Former US secretary of state Madeleine Albright and John Podesta, former chief of staff to President Clinton and CEO of the Center for American Progress, have urged rich world leaders assembled for the G8 summit in Japan to take action on the global food crisis, including rapid release of Japanese rice stockpiles imported mostly from the US. In an Op-Ed in today's Boston Globe they write:
A few weeks ago, our CGD Note, Unwanted Rice in Japan Can Solve the Rice Crisis -- If Washington and Tokyo Act, created quite a stir. Policy makers and the public could not believe that Japan was feeding rice to animals at a time when millions of poor people were going hungry because food prices were unaffordable. Sadly, Tokyo's Ministry of Agriculture still does not get it.
Over the past few weeks, rice consumers in Africa and other developing countries have watched anxiously as world prices have fallen steadily, at least in part due to our insistence that Japan and other countries have stocks that can be released on world markets . It is now clear that the speculative bubble has burst -- the "dynamic" in the market is bearish despite set-backs on individual policy fronts. The pressures on rice prices continue to be downward despite everything governments are doing to keep prices up.
This is a joint posting with Peter Timmer
Rice prices have continued to tumble this week amid reports that Cambodia is moving to ease export restrictions and other exporters may follow suit. This came after Japan's announcement that it would proceed with sales to the Philippines of 250,000 tons of rice (200,000 tons of imports and 50,000 tons of Japanese rice), and a U.S. Trade Representative (USTR) statement that: "the United States was supportive of Japan's initiative." (Readers who are following this story will recall that the U.S. has the ability to block the re-export of U.S. rice that Japan was compelled to buy but never offered on the domestic market).
This post is joint with Tom Slayton, a rice trade expert and former editor of The Rice Trader
Today in Tokyo, Japan's Vice Minister for Agriculture, Toshirou Shirasu, told reporters that Japan plans to export 200,000 tons of rice to the Philippines "as fast as possible." This confirmed sale comes on top of 50,000 tons of Japanese rice previously under discussion. Even the anticipation of these sales had done much to take the speculative steam out of over-heated global rice markets, as we reported towards the end of last week (see "Rice Prices Fall After Congressional Hearings But Crisis Not Over Yet"), so with some sales now officially confirmed we can hope to see further easing of speculative pressures.
This post is joint with Tom Slayton, a rice trade expert and former editor of The Rice Trader
It has been a busy week in the rice markets following CGD's release on Monday of our note about how to puncture a speculative price bubble that threatens millions of people with malnutrition and worse (see Unwanted Rice in Japan Can Solve the Rice Crisis--If Washington and Tokyo Act ). On Wednesday our proposal was discussed at hearings on the world food crisis in both the House and Senate.