Information service of the Pontifical Mission Societies since 1927
Rome (Agenzia Fides) – The increase in the cost of basic food items on a worldwide level is having more and more drastic affects on the lives of millions of people. This is the most alarming and dramatic announcement of recent months, as a food crisis continues to spread on a global level. The continent that is most affected by the soaring prices- also due to the heavy speculation component – is Africa, however the situation in various Asian nations is becoming quite critical, as well. For example, the increase in the cost of rice and grain have caused difficulties in a vast area including several southeastern Asian countries. The FAO launched a warning on the rise in the prices of agricultural products just days before the world food summit is scheduled to take place in Rome, June 3-5, upon the initiative of the UN entity itself.
In addition to all this, there are the serious repercussions that this has on agricultural production and on the food crisis that hits the area, the various natural disasters that have taken their toll on various Asian countries. The cyclone that hit Myanmar destroyed rice plantations, while similar events have occurred in India, Bangladesh, and Indonesia. The cold wave that affected China and Vietnam has also produced similar negative results. According to the United Nations, the cost of agricultural products should cut back a bit, in relation to recent skyrocketing of prices, however according to a joint report from the OECD-FAO entitled “Agricultural Outlook 2008-2017”, over the next 10 years, they are expected to reach levels much higher than the average of this past decade.
The high prices will mainly affect the poorer populations and those suffering from famine, especially the poorer consumers from urban areas and food producers from the rural areas of countries with lower interest rates. According to the FAO, there is an urgent need to begin mobilizing humanitarian aid that can face this dramatic situation. But, in order to find lasting solutions and avoid similar situations from occurring in the future, these countries need to focus on increasing their agricultural manufacturing and production, as well as a general growth and economic development.
The speculations and increase in the cost of rice are now a cause for particular alarm. Rice is a vital part of the diet of 2.5 billion people in Asia, where 90% of the world’s 666 million tons of rice is produced. Speculations on these future prospects caused an increase in prices, commercial restrictions, and hoarding that has led to food emergencies in many countries: from Philippines to Haiti, from Indonesia to Senegal.
The rice in fact has set a historic record: 24.82 dollars per hundredweight (50.8 kilos), with an over 60% increase since last year. This is the price given by the Chicago Board of Trade, a reliable reference in matters of international trade of agricultural raw materials. As well, in Asia the price has risen and in a matter of weeks, has gone from 460 dollars a ton, to 1000 dollars. The most recent report issued by the International Rice Research Institute (IRRI), headquartered in the Philippines, says that the price will continue increasing at least until the end of 2008.
Dwindling food reserves, natural disasters, export complications among countries, and large-scale speculation activity are all various factors that could be determining ones in this alarming situation. In India, rice exports have been prohibited and the import tax on wheat has been reduced. China has announced its increase in the price paid to farmers in order to guarantee the availability of the product and stop the rise of internal inflation. The Philippines, the main importer of rice on a global level, has announced its plan to grow 600,000 hectares of rice. Vietnam, #3 world-exporter, has decided to reduce its exports to 11%. (Mtp) (Agenzia Fides 30/5/2008)
