Grain prices soar globally

Christian Science Monitor: Grain prices soar globally

Rice shortages are appearing across Asia. In Egypt, the Army is now baking bread to curb food riots.

Bangkok, Thailand – – Rice farmers here are staying awake in shifts at night to guard their fields from thieves. In Peru, shortages of wheat flour are prompting the military to make bread with potato flour, a native crop. In Egypt, Cameroon, and Burkina Faso food riots have broken out in the past week.

Around the world, governments and aid groups are grappling with the escalating cost of basic grains. In December, 37 countries faced a food crisis, reports the UN Food and Agricultural Organization (FAO), and 20 nations had imposed some form of food-price controls.

In Asia, where rice is on every plate, prices are shooting up almost daily. Premium Thai fragrant rice now costs $900 per ton, a nearly 30 percent rise from a month ago.

Exporters say the price could eclipse $1,000 per ton by June. Similarly, prices of white rice have climbed about 50 percent since January to $600 per ton and are projected to jump another 40 percent to $800 per ton in April. …

Here is a key observation:

…Analysts note that the current shortage isn’t hitting as many people as hard as past shortages. As incomes rise worldwide, food is a smaller portion of the family budget. “Governments have tried to protect domestic prices from fluctuations in international prices, and they have succeeded in the past,” says Sumiter Broca, a policy analyst at the FAO. “The key point is that the proportion of income spent on food is much lower than it used to be, so that provides a cushion. The situation is not as serious as it was in 1974.”

Citizens of Nepal and India now spend about 35 to 40 percent of income on food, down from about 70 to 80 percent in the early 1970s, Mr. Broca says. In developing countries, food costs eat up only about 7 percent of household incomes.