Rising rice prices fuel fears of food shortages and starvation

International aid agencies are increasingly worried by the recent dramatic rise in food costs, and particularly rice prices, across Asia and the effect this will have on food assistance projects for the poorest people in the region.

The UN World Food Programme (WFP) is watching the rising price of rice, especially in Thailand, with alarm. “I have sleepless nights,” Jack Keulemans, regional procurement officer for the organisation, told IRIN.

“As prices go up in the world market many millions of people across Asia will face food shortages and possible starvation,” WFP regional spokesperson Paul Risely said. “Every day we are battling to procure food, and every day millions of people in Asia are in greater danger of going hungry.”

WFP estimates that at present prices, it needs more than US$160 million to maintain its current commitments in the Asia region. But, according to Keulemans, with rice prices increasing daily, the organisation will soon be hard-pressed to purchase rice at any price.

“It's not that we are panicking just yet,” Erika Joergensen, WFP's deputy regional director for Asia, told journalists in Bangkok last week. “But we are cautioning that unless this situation improves it may really become a major problem.”

International shortage

The rice price in Thailand alone has more than tripled since the beginning of the year. This week, the export price of Thai rice topped US$1,000 per metric ton – the highest since the early 1970s during the OPEC oil squeeze. More critically, there is also a shortage of rice and other grains on the international market.

World stocks of grain are at their lowest for more than 20 years, according to agricultural experts. International rice supplies are at their lowest since 1976.

The availability of rice on the international market has been further exacerbated by the decision of many of the world’s leading rice exporting countries to limit sales or ban them altogether.

Last week, the Cambodian prime minister urged people not to panic buy or hoard rice. In the past few weeks leading rice exporters, including Egypt, India and Pakistan have halted almost all exports of rice, at least for the time being, while China and Vietnam have also dramatically reduced their exports.

While this may help stabilise rice prices locally and ensure supplies in the supermarkets, it is not good news for importing countries like the Philippines and Timor-Leste, or aid agencies seeking rice supplies, according to WFP.

Contingency plans

The agency says it will have to reduce the size of food rations, or reduce the frequency of distribution to once a fortnight instead of once a week, if it does not receive more funds. Only as a last resort would WFP stop distribution all together, Risely told IRIN.

The situation in Thailand, the world’s biggest rice exporter and where WFP buys most of its rice requirements for Asia, seems to be getting worse daily.

“The price is almost certain to continue to go up in the near future,” said Vichai Sriprasert, president of Riceland International, a major Thai rice exporter. “Exporters who have stocks are making a lot of money, as millers who have supply contracts are not actually delivering the rice.”

Many aid experts blame speculation and media reports about the prospect of further rises in rice prices for the regional price-hike crisis.
According to Prasit Boonchuey, president of the Thai Farmers’ Association, rice farmers do not seem to be benefiting from the increased prices. He said they have to sell their grain immediately after harvest because of the lack of storage facilities.

WFP is not alone in sounding the alarm about a pending rice crisis. Thousands of Burmese refugees, who fled across the border into Thailand to escape the military government, are now facing severe rice shortages.

Poorest people suffer

“The rice price is killing us,” said Jack Dunford, head of the Thailand Burma Border Consortium (TBBC) of agencies that provide food, shelter and other aid to more than 140,000 refugees along the border with Thailand.

The agency has appealed to its donors for more funds, but is seriously considering reducing the rations it currently provides the refugees. “This is a very vulnerable group of people,” Dunford said. “We may have to cut our support to them.”

His sentiments mirror those of many aid workers and UN officials providing support for the poorest people in the region. “They are the ones who are going to suffer most if the rice prices continue to skyrocket,” said WFP’s Risely.

“There is a potential for a significant humanitarian crisis as a result,” he told IRIN. “We have already seen unrest in some places in the region where price rises have affected people.”