Costly food, supply concerns prompt
Asian grains buying
By Ahmad Fraz Khan
buyers are snapping up more rice and cheap Australian wheat
to boost food and feedstock security in the face of record
high prices that policymakers fear could stoke popular
discontent and damage their economies.
World Bank President Robert Zoellick said global food prices
have reached “dangerous levels”, underlining the anxiety
among governments keen to head off a repeat of the 2008 food
crisis, which sparked riots in countries from Egypt to
“There is stockpiling and hoarding going on from Bangladesh,
right through Indonesia and the Philippines, as everyone is
scared about food inflation,” said Sajjid Haider Pasha,
director of Hong Kong-based grains trading and shipping
agency Shunshing Group.
“But we are not sure for how long people can maintain such
strong momentum on imports,” he said on the sidelines of the
World Grains Trade Summit in Singapore on Wednesday.
Grains traders said the Philippines had secured one of its
biggest soymeal import deals in years out of concern that
grains prices – already their highest in more than two years
– will keep rising.
Fear of wheat shortages in 2008 led to a scramble for
supplies, leading to restrictions on rice exports by key
suppliers and to a rally in the price of the Asian staple.
Many analysts play down the prospect of a repeat of the 2008
crisis, which also spurred high inflation and deep trade
deficits as countries coped with rising import costs.
Still, world grain supplies have been tightening for months
as droughts; floods and fast-growing demand have caused
prices of wheat and corn to more than double from last
Wheat, corn and soybean prices are at prices last seen in
2008, although below that year’s peaks. One key difference
now is that rice is less than half of its 2008 peak.
Buyers are scouring the globe to tie-up food supplies for
both population and livestock.
Bangladesh is paying up to import 200,000 tonnes of Thai
parboiled rice in a government-to-government deal, sources
said on Wednesday, part of a plan it announced last month to
triple imports to boost stockpiles and supply security.
The price is $580 a tonne, over $50 a tonne more than it
paid for parboiled rice from an Indian firm through a
Bonanza for exporters
Australia provides a temporary solution for buyers looking
to cap the cost of feeding livestock because floods have
forced as much as half of its bumper wheat crop to be
downgraded to animal feed.
One of those buyers could be Japan, which is considering
plans to replace 1 million tonnes of its imports of corn
this year with feed wheat and rice, Mitsutoshi Tada, chief
grains trader for the National Federation of Agricultural
Cooperative Associations in Japan, a leading importer, said
Tada did not break down how much would be rice for human
consumption and how much would be wheat feed for animals.
The Philippines has bought 200,000 tonnes of Australian feed
wheat for shipment in April and June, traders at the
Singapore summit said.
It also signed one of its largest soymeal import deals in
years, buying 240,000 tonnes of the feed ingredient from
South America last week for shipment between April and
August, they said.
The world’s biggest wheat producer China has already bought
up to 500,000 tonnes of Australia’s feed wheat, and may
double that to a million tonnes this year, traders said this
A drought in China’s wheat-growing north has put the crop at
risk, although the area under threat is shrinking following
snow and efforts by farmers to improve irrigation.
China has wheat reserves to meet a year of consumption, but
the drought has caught the attention of investors globally
after the U.N. Food and Agriculture Organisation warned last
week the drought was “potentially a serious problem.”
Australia is not the only country cashing in on abundance in
a time of global shortage.
Pakistan last month resumed wheat exports for the first time
in three years and has already sold 1 million tonnes to
Bangladesh, Indonesia and Vietnam, traders said on
The Group of 20 leading nations, whose finance leaders meet
on Friday and Saturday in Paris, has promised to take action
on rising food prices.
France – the revolving G20 president this year – is
struggling to garner support for its plans for tough curbs
on commodities speculation.
Indonesia said on Wednesday it would urge the G20 this
weekend to put pressure on financial markets to clamp down
on speculation on food prices.
Courtesy: The DAWN