Philippines rice crisis raises alarm over global inflation

Rice inflation in the Southeast Asian nation accelerated at its fastest pace in nearly five years in August, with the Philippine central bank warning it was ready to tighten monetary policy further if needed, while other countries rushed to secure supplies.

According to Shirley Mustafa, an economist at the Food and Agriculture Organization of the United Nations (FAO), the current rice market is witnessing a lot of uncertainty. Price pressures are being exacerbated by controls from major exporting countries.

India’s ban has roiled food markets and left countries worried about securing supplies, while governments scramble to contain rising prices for rice, a staple food for billions of people across Asia and Africa.

The Philippine government imposed a price ceiling on rice in early September due to alarming increases in retail prices.

Securing rice supplies is a top priority for many countries, forcing leaders to act quickly. As a result, the Philippines is planning a five-year deal with Vietnam.

Senegal is making diplomatic overtures to India, similar to what Guinea and Singapore have done to secure supplies.

Indonesia has signed its first supply deal with Cambodia in more than a decade. The deal is for up to 250,000 tonnes a year, double the volume of a similar deal in 2012. Jakarta has pledged to provide 10 kg of grain a month to millions of poor households in the fourth quarter of this year.

Several countries are also taking steps to stem rising rice prices. Malaysia has imposed purchase limits and launched inspections of wholesalers and commercial millers amid allegations that domestic rice is being sold as imported rice at higher prices.

Myanmar has also imposed a mandatory system of recording rice stockpiles to control domestic prices and prevent speculation.

Rice markets cooled this week as Asian prices eased slightly, but prices of the grain remained near their highest levels since 2008.

We need to be vigilant about global food security. That is the warning of economic experts. Especially in many African countries, where broken rice is popular and consumed on average 70 kg/person/year, rice prices still pose many risks.

In addition, although Europe has a good rice harvest, prices do not tend to decrease, but even increase. Explaining this reason, Mr. Bertrand Mazel, President of the French Rice Growers Union, said: "Rice production in Europe this year will reach nearly 3 million tons, but consumption will reach nearly 4 million tons."

The lack of supply will keep rice prices high on the world market. Farmers can therefore be happy that their rice is still fetching good prices. “In the Vercelle rice market in Italy, prices have remained at €600 per tonne since the beginning of the year, compared to €400 per tonne 18 months ago,” Mazel pointed out.