Asia limits rice exports as prices and uncertainty rise
Top exporters are trading less of the staple food, hurting countries that rely on imports.
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Unlike the rest of Asia, there is actually a rice glut in Japan, and rice prices are falling, according to the Wall Street Journal. Last year, Japanese farmers produced 8.71 million tons of rice, against a demand of 8.33 million tons. Japanese consumers pay two to three times more for rice than other Asian consumers do, as part of a program to generously subsidize rice production.
South Korea looks prepared to weather the current crisis. Last year it produced 4.68 million tons of rice, more than enough to meet the 4.16 million tons of demand. Still, rice prices have shot up 75 percent in the past two months.
Australia used to produce 700,000 tons of rice and export around 600,000 annually, contributing 2 to 3 percent of the world's rice trade. But six years of drought, which has not been offset by added spending on irrigation, have shrunk the rice industry by 98 percent. Australia expects to have its lowest output since rice production began in the country in the 1920s.
North Korea may be among the countries hardest hit by the rice crisis. Severe flooding last year wiped out about 11 percent of the country's crops, creating what observers say is the country's worst food crisis since a famine in the 1990s, in which as many as 2 million people died.
North Korea usually relies on rice imports from China, but those are likely to be limited because of China's new export restriction. South Korea has annually exported 400,000 tons of rice to the North, but that arrangement has come under threat as relations between the North and South have faltered over Pyongyang's nuclear proliferation.
The world's largest importer of rice, this nation imported 1.9 million tons of rice in 2007 and this year expects to import 2.7 million tons – a 42 percent increase. The price of rice has risen 30 percent in the country since January. In response, the government has flooded markets with subsidized rice, banned conversion of farmland for development, threatened rice hoarders with life imprisonment, and announced a $1 billion rice production package .
Malaysia produces two-thirds of the rice needed to feed its population of 27 million and imports the rest from neighbors. But Vietnam and Cambodia have imposed export restrictions, and some analysts worry the government has not ensured an adequate rice stockpile.
The ruling party did poorly in March elections, with voters citing food prices among their greatest concerns. Last week the government announced a $1.3 billion plan to ensure self-sufficiency in rice production.
Bangladesh produces about 28 million tons of rice a year, but it is not enough to feed the country's 140 million people. Inclement weather such as last November's cyclone Sidr damaged many crops. The country now faces acute shortages. On Saturday it put out a bid for 50,000 tons of rice to stabilize emergency stocks after last week's bid for 25,000 tons went unanswered.
Officials say that they have imported about 3 million tons of rice and wheat for the current fiscal year and hope to import 4 million tons total before it ends in June. Hoarding has been a problem, and food prices have doubled in the past year, leading to riots in the capital, Dhaka, last week.
Sri Lanka produces about 3.3 million tons of rice a year, which makes it nearly self-sufficient in rice. But heavy rains and flooding last year wiped out about 2.5 percent of the yield, according to the United Nations Office of Humanitarian Affairs.