AFTER months of startling increases, the prices of rice, wheat, soybeans and several other foods have come down recently, a development that could ease some of the panic in global food markets.
Prices remain volatile and remarkably high by historical standards, and few agricultural experts expect the days of inexpensive food to return soon. There is no sign of a drop steep enough to make food affordable again for the hundreds of millions of
people in poor countries who are struggling to maintain adequate diets.
The spot price of rice from Thailand has dropped by close to 20% in the last two weeks after nearly tripling in the first four months of this year. Rice prices on American markets rose last week, including a sharp increase on Thursday, but are still down 10% from their high on April 23.
Similarly, despite jumps in the last few days, contracts for future delivery of American wheat and soybeans are down markedly from their highs in March – by 34% in the case of wheat.
"The floodwaters have stopped rising, but the problem isn't over yet, and prices could stay at this level a few years," said Nicholas Minot, a senior research fellow at the International Food Policy Research Institute in Washington.
Agricultural markets remain deeply unsettled. For several years, farmers have been unable to catch up with rapidly rising demand for food and animal feed, and the world's grain stocks have been falling. The situation peaked in recent months as prices spiralled out of control, setting off hoarding in many countries and food riots in at least 19 of them.
US corn prices hit yet another record last Thursday, just above $6.30 a bushel, amid fears that rainy weather in the Midwest would suppress yields this summer. Most corn is not used for food; it is used for animal feed and, increasingly, for ethanol production. The high corn prices of recent years have prompted farmers to plant more of it, displacing crops such as wheat and contributing to higher food prices.
Experts say shoppers may not see much benefit from the recent price dips. Many retailers and wholesalers had not yet passed the full extent of this spring's price increases along to consumers.
The spot price of a heavily traded good grade of rice exported by Thailand peaked at $1,100 a ton in late April, with a few purchases at even higher prices by buyers demanding huge quantities. But traders said last Thursday that the going price was $880 to $920 a ton.
"I don't expect a crash in prices, but I think there is a correction," said Ben Savage, the managing director for rice at Jackson Son & Company in London, one of the world's oldest rice brokerage firms.
Rice is perhaps the world's most politically fragile crop. Nearly half the world's population depends on it as a staple food. An even higher proportion of the world's poor people depend on it, as imported rice has displaced local crops in cities across Africa and the Caribbean over the last decade, even as the crop retained its primacy in Asia.
The latest rice prices are still far above the price of $385 a ton prevailing in mid-January, and even further above the 2003 price of $200 a ton. Even with the slight decline in prices, the cost of rice remains high enough to put considerable strain on poor families in countries such as the Philippines and Nigeria, the world's two largest rice importers.
"The market has been a buyer's market for 40 years and recently it switched to being a seller's market, particularly in the last few months," said Vichai Sriprasert, president of the Riceland International company in Bangkok.
While rice prices have fallen in recent days, global rice consumption remains greater than production, he said, adding: "It will remain a seller's market for years to come."
The full article contains 658 words and appears in Scotland On Sunday newspaper.
