Monday, October 10, 2011

Gambia: Rice price may skyrocket

The price of Gambia’s staple food may skyrocket from now towards the end of the year if news from Thailand, world largest rice exporter, is anything to go by. 

Thailand has announced its intention to pay its rice-growers far above market rates and this is expected to push up prices for the food that the entire Gambia depends on and it is said to feed almost half of the world’s people.

The Gambia imports most of her food requirements, particularly rice, and produces not more than 30% of its rice requirement, which makes it very vulnerable to rise in prices and reduction in supplies from the international market as the country depends heavily on importation.  The price of imported rice has quadrupled since 2002; and it continues to rise by the day.

The Gambia like many countries in Africa at large imports most of its rice from Thailand but it is reported that many rice importing countries are looking to other countries for supplies.

Efforts to get comment from the local rice importers proved futile but our source, who is an employee of one of the rice importers, said currently there is enough rice in stock in the country so there is no course for alarm and prices will be stable.  Our source explained that Thailand is not the only country they import rice from, so there are alternative countries to import from.


The Associated Press reported that the new government of Thailand has promised rice growers higher prices for rice in a scheme that should take effect in this month, October.   The Thailand government says it is putting no limit on the amount of rice it will buy.

Thailand's move has underlined the importance of boosting local production and having a broad range of possible sources.

What's good for Thai farmers, who have long complained of being shortchanged by middlemen, is proving less popular elsewhere in Asia and Africa. The effects of the rice policy are rippling through the regions where many countries are already struggling with fast rising food prices.

“Thailand's rice exporters say they will ship less overseas because they will be unable to compete with the price the government pays. That in turn will tighten the global rice market, forcing up the staple's price in other countries,” AP said.

The US Department of Agriculture forecasts that Thailand's rice exports will drop 20 per cent to 8 million metric tonnes in 2012 because of the rice buying scheme. That could see Vietnam overtake Thailand as the number one exporter.

Analysts said the rice prices in the global market will definitely escalate, since the supply from Thailand, the biggest exporter, is seeing a downturn.

Meanwhile, the United Nations Food and Agriculture Organisation (FAO) has said that world food prices remained virtually unchanged during the month of August, with only slight increases observed in the prices of cereals and meat.

FAO's monthly Food Price Index averaged 231 points in August compared to 232 points in July, the Rome-based agency stated in a news release. It was 26 per cent higher than in August 2010 but seven points below its all-time high of 238 points in February 2011. The price indexes for oils/fats, dairy and sugar all saw declines last month, the agency added.

The prices of cereals rose reflecting the fact that although cereal production is expected to increase, it will not do so by enough to offset the additional demand, so that stocks continue to be low and prices continue to be high and volatile, according to FAO.

“Cereal price rises stem from a supply and demand balance that remains tight despite the anticipated increase in production,” it stated, adding that world cereal production is now forecast to reach 2,307 million tonnes this year; 3 per cent higher than in 2010.

Among the major cereals, the maize supply situation is a "cause for concern" following downward revisions to maize crop prospects in the United States, the world's largest producer, because of continued hot weather in July and August.

Average wheat prices were also up 9 per cent in August given the strong demand for feed wheat and shrinking supplies of high quality wheat.

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