Rice price hits new high on global markets

The prices of rice in Thailand, the world’s top exporter, surged to a record high above US$1,000 (S$1,360) a tonne yesterday as fears of a global shortage spread as far as the United States.

Thai 100 per cent B grade white rice, the world’s benchmark for global trade, was quoted in a range of US$1,000 to US$1,080 per tonne.

This week’s 5 per cent jump takes prices to nearly three times their level at the start of the year.

Rice futures in Chicago also rose above US$25 per 45kg on Wednesday, but eased slightly in early trading yesterday.

The price surge, which started when India imposed export curbs last year and has since led to shortages and riots from Egypt to Haiti, has made its way to US shores.

Americans have been cleaning out the shelves at major retailers including Wal-Mart’s Sam’s Club and Costco Wholesale Corp.

On Wednesday, Sam’s Club said customers could buy only four 9kg bags of jasmine, basmati and long-grain white rice per visit. Its rival Costco has already limited customers to two bags of rice a day at some of its stores.

‘It is like a run on the bank. We don’t think there is a shortage; it is just increased shopping by customers who think there is,’ said Costco’s chief financial officer, Mr Richard Galanti.

But the upward surge of rice prices shows no sign of abating. In Bangkok, some traders said Thai 100 per cent B grade white rice could hit US$1,300 a tonne due to unsated demand from the No. 1 importer, the Philippines.

Pressure on supplies and prices increased on Wednesday, when Brazil became the latest country to suspend rice exports, following in the footsteps of India and Vietnam.

But Thailand, which accounts for nearly a third of all rice traded globally, has said it will not impose any curbs. Yesterday, a Thai government spokesman reiterated that the country will meet all export commitments.

Mr Wichianchot Sukchotrat was speaking in Kuala Lumpur, where Thai Prime Minister Samak Sundaravej met Malaysian leaders, during which food security was a key topic of discussion.

‘We don’t need to restrict Thai exports because in the next few months, a new crop will come out,’ the spokesman said.

In Singapore, where most rice imports come from Thailand, importers say it is getting more difficult to hold back on price increases given the more frequent, and steeper, price jumps in global markets.

Singapore’s biggest supermarket chain, NTUC FairPrice, said it will moderate price increases and stagger them to soften the impact on consumers.

Said its spokesman: ‘Our current rice stockpile was secured at a lower price a few months ago. Going forward, we have to import rice at prevailing market rates which have increased by more than 100 per cent since March last year.’

The Government has highlighted three measures to help the needy: bigger and earlier payouts for those on the Public Assistance Scheme; two instalments of Growth Dividends; and targeted help from the citizens consultative committees (CCCs).

Most of the CCCs that spoke to The Straits Times said there was an increase in the number of people approaching them for help.

Price rise

By Jessica Lim & Lee Pei Qi, ST

That bowl of rice is going to cost more, following a worldwide jump in grain prices.

Supermarket chain NTUC FairPrice, the island’s biggest with 80 stores, which had been holding out on raising prices of its house brand rice, gave in yesterday as global grain prices shot up 30 per cent overnight.

It raised the prices of three inhouse varieties by 10 per cent to 15 per cent, the first hike since the middle of last year, when the goods and services tax went up, said a spokesman.

A 5kg bag of FairPrice Thai White Fragrant Rice now costs $5.30, up from $4.70, and a 10kg bag of Double FairPrice Thai Hom Mali Rice now goes for $17.90, up from $16.25.

Prices of non-house brand varieties of rice at FairPrice and other supermarkets have gone up, as and when suppliers had adjusted prices.

The latest adjustment follows skyrocketing world grain prices, which have jumped 50 per cent over the past two months and at least doubled since 2004.

On Thursday, the prices of Thai rice, a global benchmark, jumped 30 per cent to an all-time high of US$760 (S$1,050) per tonne after Egypt – a leading exporter – imposed a formal ban on selling rice abroad in a bid to stabilise soaring prices at home.

Prices now fluctuate with each shipment, say importers here.

Previously, exporters used to keep prices unchanged for three to six months at a stretch, said the owner of rice importer Chye Choon Foods, Mr Jimmy Soh, who supplies rice and noodles to supermarkets and about 700 provision shops.

‘For us now, prices change each time we get new supplies. Exporters also ask us to top-up prices stated in old contracts,’ he added.

He and four other companies that import rice and manufacture rice noodles or bee hoon have already told customers to expect prices to go up again next Tuesday by about 20 per cent.

Last year, Singapore imported 326,854 tonnes of rice, with close to 60 per cent of it coming from Thailand.

Vietnam and India make up another 30 per cent, with the rest coming from another 15 or so countries, including just over 2,000 tonnes from Egypt.

But as more countries impose export restrictions, importers here are worried about securing supplies.

Said rice importer Goh Hock Ho, managing director of Saga Foodstuffs Manufacturing: ‘Countries are tightening their supplies. Vietnam is now not renewing their contracts to small companies like us. Now the whole world depends on Thailand.’

The price hikes have already reached hawker stalls.

A bowl of rice at Madam Han Yei Liang’s chicken rice stall went up from 50 cents to 60 cents two days ago.

It is the first time she has raised prices at her two-year-old stall, even though her costs have jumped every week over the last month, she said.

She now pays $12 more per 50kg bag of rice, compared to a month ago, and was warned that the price would go up again by $3 next week.

Said the 50-year-old owner of Rui Kee Hainanese Chicken Rice on North Bridge Road: ‘I try to absorb the price first because I do not want to lose customers. But the price increase over the last month is just too much and too scary.’