Rice climbed to a record on speculation the 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 as much as 2.8 percent in Chicago and has doubled in the past year. Demand has increased on rising imports by the Philippines, the biggest buyer, and as global food supplies lag behind demand growth fueled by China and India.
``A lot of what we're seeing at the moment is not related to production, but the fact that a number of countries are implementing trade restrictions,'' said Darren Cooper, a senior economist at the International Grains Council in London.
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, more than all of last year's 33 percent gain. 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 rose 33 cents, or 1.7 percent, to $20.12 per 100 pounds at 11:23 a.m. on the Chicago Board of Trade, after the United Nations' Food and Agriculture Organization said global exports will drop 3.5 percent this year as nations curb sales. Rice earlier reached a record $20.35.
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.
Commodity Prices
Commodity prices are posting their seventh year of gains. The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials more than tripled in the past six years as global demand led by China outpaced supplies of metals and crops. The Standard & Poor's 500 Index of U.S. equities gained 21 percent over the same period.
``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.
Pakistan, the world's fifth-biggest rice exporter, may ship 15 percent less of the grain this year after a power shortage affected milling of paddy, Mohammad Azhar Akhtar, chairman of the Rice Exporters Association of Pakistan, said by telephone.
Grain Rallies
Eroding global inventories also have fueled rallies in corn, wheat and soybeans.
Corn has gained 71 percent in the past year, touching a record $5.9925 a bushel yesterday. Soybeans are up 64 percent in the past 12 months, reaching $15.8625 on March 3, the highest ever. Wheat rose to a record $13.495 a bushel on Feb. 27 and has more than doubled in the past year.
Indonesia, the world's third-largest rice producer, may join China, India, Vietnam and Egypt in curbing exports to secure domestic supplies, Agriculture Minister Anton Apriyantono said yesterday in a text message to Bloomberg News.
Consumer prices in China rose 8.7 percent in February, an 11-year high, and reached a 13-month peak in India. Food prices in China, based on a government index, jumped 28 percent in February, the most since July.
The United Nations warned in February that 36 countries, including China, face food emergencies this year, as stockpiles of grains such as rice drop to a 26-year low.
Vietnam Rice
The Vietnam Food Association has asked its members to stop signing new rice-export contracts between April and June, following Prime Minister Nguyen Tan Dung's directive to cut deliveries of the grain overseas.
Vietnam, one of the world's three biggest rice exporters, will reduce shipments this year to 4 million tons to ensure supplies domestically and curb inflation that's at its highest in more than a decade. The government also said it's considering a tax on rice exports.
Malaysia plans to step up efforts to import rice from other Southeast Asian nations to build reserves. The Philippines is buying the grain from an emergency regional stockpile and taking additional supplies from the U.S
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