By Carlos Mera, Rabobank
As the world grapples with major economic and geo-political changes, we have predicted that food prices – which like all commodities are influenced by such forces – will remain low during 2017.
We believe the fundamentals support that view: while the spectre of inflation stalks some economies, stock levels of food commodities are at record levels, applying some downward pressure to prices. Many of these reserves are held by China. Therefore, what action the world’s most populous country takes in 2017 will have profound repercussions for everybody else. Read more
As a seasoning, salt goes well with rice. In many developing countries, poor families who cannot afford any dish at all sometimes eat boiled rice with nothing but a pinch of salt.
But salt in the soil where rice is grown ruins the crop, a problem that is worsening in Asia. Can anything be done? Read more
Nigeria’s economy remains hooked on oil revenues, but its government is hoping agriculture might help ween it off. Around Davos this week, president Goodluck Jonathan has been talking up the sector, announcing production increases of 8m tonnes during 2012. This sounds impressive, but behind the numbers lie an array of problems. Read more
After more than 30 years at the top, Thailand has lost its spot to India as the world’s number one rice exporter, slipping to third place last year due largely to a controversial government farm subsidy policy.
Now some critics say that as well as disrupting exports, the policy could undermine the food security because the government’s radical intervention could make supplies less stable in the future. Read more
Who would have thought India would be feeding the world? For the first time, India has overtaken Thailand to become the world’s largest exporter of rice. It’s largely a matter of policy: India is reaping the rewards of past reforms, while Thailand is stumbling over past mistakes. Read more
Elections tend to be won by governments that give the people what they think they want. Thailand’s rice farmers think they want to be paid well over the odds for rice they sell to the government – and that is what has been happening under the administration of prime minister Yingluck Shinawatra since she swept to power last year.
But this populist “rice pledging” policy looks very likely to become unpopular, possibly more quickly than the government yet realises. Read more
Droughts in the US have led to prices for corn and soy hitting record levels in recent weeks, and talk of a new world food crisis abounds. Previous price spikes in 2008 and 2010-11 created shockwaves throughout the developing world, leading to riots in more than 30 countries and, some argue, acting as a catalyst of the Arab Spring.
What are the likely emerging market impacts of the current market movements? Beyondbrics offers a (non-exhaustive) roundup of analysis on the Brics grain situation from the FT and elsewhere. Read more
India needn’t be all that anxious about Iran’s default on payments for rice imports, as neighbouring Iraq is set to boost its own imports of premium quality aromatic rice from the world’s third-largest exporter of the grain.
With the value of rice exports to the once war-torn country tripling to $28m in the past three years, Indian industry members told beyondbrics they were very optimistic about Iraq’s potential as an export destination, in spite of the often precarious security situation there. Read more
The Philippines may have to import more rice next year than it originally planned after government estimates released this week showed the country will likely miss its 2011 production targets for the staple food that most Filipinos eat three times a day. Read more
Rice is more than just another commodity: for 3bn people it is a vital part of their daily diet, and when prices hit over $600 a tonne, or some 50 per cent above their 10 year average, they start to worry.
The 10-year average for Thailand’s benchmark 100 per cent grade B white rice is around $400 a tonne but today it is selling for $619 a tonne. That is partly because Thailand, the world’s biggest exporter, has said that it would pay its farmers Bt14,800/tonne – equivalent of about $800/tonne in the export market, in a move aimed at boosting the incomes of rural farmers. Read more