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Rice Jumps to Record, Corn
Near High as Demand Outpaces Supply
Glenys Sim
Bloomberg
Thursday, April 3, 2008
Rice climbed to a record and corn traded near its
highest ever on speculation a 3 percent annual increase in global
demand for cereals will outstrip supply as governments curb exports
to prevent protests.
Rice, the staple food for about 3 billion people, rose 2.4 percent
in Chicago trading today after doubling in the past year. Soybeans
advanced for the third day and wheat gained as investors bought
agricultural commodities on concern dry weather in the Great Plains
and heavy rain in the eastern Midwest may curtail U.S. production
and push down global inventories.
The World Bank estimates ``that 33 countries around the world
face potential social unrest because of the acute hike in food
and energy prices,'' Robert Zoellick, the bank's president, said
on the organization's Web site. For these countries ``there is
no margin for survival,'' he said.
(Article continues below)
China, India and Vietnam have cut rice exports, and Indonesia
has reduced import tariffs to protect food supplies and cool inflation.
Rice in Chicago climbed 42 percent in the first quarter, the biggest
such increase in at least 14 years. Record grain prices contributed
to strikes in Argentina, riots in Ivory Coast and a crackdown
on illicit exports in Pakistan.
Rough rice for May delivery advanced to $20.26 per 100 pounds
on the Chicago Board of Trade today as the United Nations' Food
and Agriculture Organization said global exports will drop 3.5
percent this year as nations curb sales.
``The international rice market is currently facing a particularly
difficult situation with demand outstripping supply and substantial
price increases,'' said Concepcion Calpe, a senior economist at
the Rome-based FAO, an agency that seeks to achieve global food
security.
Full
article here.
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