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MNeagle | 12-08-2009 02:33 PM
Fear of �super-spike� in rice market Rice prices have moved to levels not seen since last year�s �super-spike� as a buying spree by the Philippines, the world�s largest importer, tightens the market. Manila received offers on Tuesday for it to buy low-quality rice at about $630 a tonne, up 30 per cent from last month�s tender, and double the $320 a tonne seen earlier this year. The rally comes as global rice production is set to fall in 2009-10 for the first time in five years as a result of India�s driest monsoon in four decades, a series of typhoons destroying crops in the Philippines and droughts elsewhere because of the El Ni�o weather phenomenon. �It feels a little like early 2008,� said Frederic Neumann, an economist at HSBC in Hong Kong, referring to the �super-spike� when rice reached a record $1,000 a tonne in April 2008. The supply shortages have triggered concerns about a surge in food inflation in Asia, where rice is a staple. Darren Cooper, a senior economist at the International Grains Council in London, said: �Rice is obviously a political commodity in Asia.� As prices soar, traders are worrying that policymakers could react with the same panic measures that fuelled the rally last year by hoarding stocks and imposing export restrictions. �This highlights one crucial risk,� Mr Neumann explained. �Prices can quickly escalate if jittery consumers and public officials see supply risks looming, even if these are more perceived than real.� Some traders and policymakers said the supply and demand imbalance was real this time. Global rice output will fall to 432m tonnes in 2009-10, according to the US Department of Agriculture. With demand at 437m tonnes, stocks will drop from an already low level. But, more worryingly, the first signs of panic buying have emerged. But other traders believe the panic is overblown, noting that stocks in key exporters such as Thailand are high despite a drop in global production. Ben Savage, managing director of Jackson Son & Co, the London-based rice broker, said the rally could be short-lived. Traders said that except for purchases by state-owned agencies � including the Philippines and Iraq � global import demand is weak now as importers bet that prices could drop early next year. The Philippines has scheduled three tenders for a record 600,000 tonnes each this month � equal to about 6.5 per cent of the world�s rice trade � as it races to build reserves ahead of presidential elections in May. Ludovico Jarina, deputy at Manila�s state grain agency, said that prices at Tuesday�s tender were �really high�. The Philippines is securing supplies amid fears that India might import rice for the first time in 20 years after bad weather hurt the country�s agriculture, further tightening the global market. The USDA estimates that India�s rice crop will plunge by more than 16 per cent in 2009-10. http://www.ft.com/cms/s/0/2248164c-e...44feab49a.html

Goldhedge | 12-08-2009 02:41 PM
Re: Fear of �super-spike� in rice market 25 lb bag of water polished rice dropped from $28 to about $25 recently.

Golddust | 12-08-2009 02:50 PM
Re: Fear of �super-spike� in rice market Yep, You can count on it!! The Philippines got hammered this year the only good thing, is they have a year round growing season. Going to be a lot of hungry and starving people in the world this year coming year until some good crops are in. And who is to say next year the weather won't do the same or worse.... Rice can not help to go up in price.....

Unclad Lad | 12-08-2009 08:20 PM
Re: Fear of �super-spike� in rice market I've barely made a dent in all the rice I bought. No need to buy more now.

MNeagle | 12-08-2009 08:21 PM
Re: Fear of �super-spike� in rice market Quote:
Originally Posted by Unclad Lad (Post 2065865) I've barely made a dent in all the rice I bought. No need to buy more now.
Same here. Just nice to know though.

Tallships | 12-08-2009 08:31 PM
Re: Fear of �super-spike� in rice market I just had some of mine for supper tonight. I have enough to last for awhile.

British Sovereign | 12-08-2009 08:41 PM
Re: Fear of �super-spike� in rice market Silence, don't tell everyone! Yes, rice is the next to double, IMO. This is the year of making or losing a fortune in futures.

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