Rice prices 'to keep on rising'
Rice prices are set to keep rising as demand for the staple is outstripping production, the International Rice Research Institute (IRRI) has said.
The Philippines-based body said in its Rice Today publication that more research was needed in how to increase rice productivity.
The price of rice has risen by as much as 70% during the past year, with increases accelerating in recent weeks.
Several rice-producing countries have put curbs on exports in recent weeks.
'Research needed'
"Longer term demand-supply imbalance is clearly indicated by depletion of stock that has been going on for several years," said Sushil Pandey, agricultural economist at the IRRI.
"We have been consuming more than what we have been producing and research to increase rice productivity is needed to address this imbalance."
The institute said several factors were behind the rise in rice prices.
Land for producing rice and irrigation water is being lost to industrialisation and urbanisation.
The growing appetite among Asia's burgeoning urban middle class, especially in India and China, for meat and dairy products is also leading to less land for rice production.
Factors such as the flooding in Indonesia and Bangladesh and recent cold weather in Vietnam and China have also hurt production, it said.
Export restrictions are in place in major rice producing countries such as India, China, Vietnam and Egypt
Rice is the staple food for about three billion people worldwide.
The prices of soybeans, corn and wheat are also near historic highs.
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Brief summary of the article:
- Price of rice has risen
- Demand-supply imbalance: High demand, decrease in supply --> higher equilibrium price
- Factors affecting supply:
> Change in the cost of production (?). As land and irrigation water are lost as a result of industrialisation and urbanisation, cost of resources needed to grow rice increases, hence supply decreases.
> Change in price of related goods. As demand for meat and dairy products increases, farmers choose to supply more of these high demand items to increase revenue. Thus, labour is used to product meat and dairy products instead of producing rice, hence supply of rice decreases.
> Changes in climatic conditions/nature. Flooding in India and Bangladesh and cold weather in Vietnam and China affects the harvest of rice negatively. Hence, supply decreases.
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- jontan
1 comment:
Can the labour used to produce rice switch to meat/dairy production readily? I think climate change is the main reason for decrease in supply.
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