According to Newspapers
A series of factors such as rising fertilizer and energy costs over the past year as well as the Russia-Ukraine war have raised prices of many foods, from wheat and other grains to meat, according to CNBC. and oil.
Countries have issued export bans on some items, such as India banning the export of wheat, Ukraine banning the export of wheat, oats, sugar…, Indonesia banning palm oil exports. Besides, there was also a serious export disruption with a number of items.
Rice may be the next commodity to increase sharply. According to new May data released last week, the United Nations Food and Agriculture Organization’s food price index showed international rice prices rising for the fifth consecutive month, reaching a 12-month high.
Rice production is still very good, experts say, but rising wheat prices and generally higher farming costs will make them keep an eye on rice prices in the near term.
“We need to keep an eye on rice prices in the future, as rising wheat prices could lead people to substitute rice, increasing demand and increasing prices,” said Sonal Varma, chief economist at Japanese bank Nomura. reduce the amount of rice available”.
Danger of protectionism
Ms. Varma added that the cost of feed and fertilizer has increased, while energy prices are making freight costs more expensive. “So there is a risk that we will see countries intensifying protectionism,” she said.
However, she said the risk to rice remains low given the global rice glut, and the harvest forecast in India will be positive this summer.
Meanwhile, Russia’s war in Ukraine has raised wheat prices. Both countries are major wheat exporters. The war has disrupted farming and blocked grain exports from the country. Wheat prices have risen more than 50% since a year ago.
On June 6 alone, wheat prices rose 4% following some developments in Ukraine. According to Reuters news agency, traders have bought more Indian rice in the past two weeks.
“I would be much more worried right now when India imposes a rice export ban in the coming weeks,” said David Laborde, senior research fellow at the International Food Policy Research Institute. as they had in mind after banning the export of wheat and sugar.”
India and China are the world’s top two rice producers, accounting for more than half of total global production. Vietnam is the 5th largest rice exporter, while Thailand ranks 6th.
India imposed a ban on wheat exports in May citing the need to manage the country’s overall food security. The country also imposed restrictions on sugar just days after the wheat ban.
Raise prices or ban exports?
A rice shop in Bangkok. Photo: AFP/VNA
Mr. Laborde said that raising rice prices would be much better than banning exports. “We should really distinguish between raising prices to offset higher costs and benefiting farmers and helping them produce, rather than an export ban,” he said. Banning exports will push up prices in the world market but drag them down in the domestic market.
Mr. Nafees Meah, regional representative for South Asia at the International Rice Research Institute, added that rising energy costs globally account for a large part of the cost of rice production. Therefore, the price of rice increases but farmers do not benefit.
Meanwhile, rising rice prices will adversely affect many people in Asia, where rice is the largest consumer.
Therefore, in the Southeast Asia – Pacific region, countries such as East Timor, Laos, Cambodia and Indonesia will be affected quite badly if prices continue to rise and stay at a very high level.
According to Frederique Carrier, Managing Director at RBC Wealth Management, the United Nations food price index shows prices are now 75% higher than pre-pandemic levels.
“The labor shortages related to the pandemic and Russia’s war in Ukraine have exacerbated the situation by both cutting food supplies and pushing up energy prices,” she wrote in a June report. the amount is even higher”.
About a third of the cost of food production is related to energy, Ms. Carrier said. Fertilizer production in particular takes a lot of energy, and prices have skyrocketed since last year.
