Jubilee21
May 16th, 2008, 09:50 PM
:twitch
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article3943779.ece
Leo Lewis, Asia Business Correspondent
Rice prices nosedived today as Japan moved closer to unlocking its massive hidden surplus and bullish supply forecasts routed speculators.
The price collapse came as commodity experts called on Japan and the US to urgently unwind one of the biggest “invisible” distortions in global rice markets: a quirk of World Trade Organisation rules that obliges Tokyo to buy grain it does not need and effectively turns millions of tons of high-grade American rice into feed for Japanese pigs.
If that distortion were removed, said researchers at the Washington-based Centre for Global Development (CGD), and the 1.5 million tons of unwanted US rice were released from Japan’s storage silos, the crisis that has sent the price of the crop that feeds half the world would be instantly solved. Rice prices, suggested the group’s forecasts, could even halve between now and June.
Standing in the way of that, however, is a rule that prevents Japan from re-exporting its reserves of US rice without permission from Washington – permission that has not been forthcoming until now, but which The Times has learned may be just hours away from being granted.
Behind the sharp drop, which contributed to a 14 per cent collapse in the rice price over the week, were forecasts of a good harvest and suggestions that some of the recently imposed export restrictions on rice might be relaxed. Pakistan today said that it would allow 1 million tonnes of rice to be exported.
Traders warned, however, that many of the factors that have propelled rice prices to their recent highs remain in place. The destruction of Cyclone Nargis has effectively turned Burma from an exporter to the global rice economy to an importer and export restrictions from India and Vietnam remain firmly in place.
"Permission was not forthcoming from Washington, until now?"
:thinking
Wonder what that was all about?..the folks hit by the earthquake and cyclone perhaps?
Am guessing the amount is not large enough to make up for the shortages, but if it lowers the price in stores, that would be great!
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article3943779.ece
Leo Lewis, Asia Business Correspondent
Rice prices nosedived today as Japan moved closer to unlocking its massive hidden surplus and bullish supply forecasts routed speculators.
The price collapse came as commodity experts called on Japan and the US to urgently unwind one of the biggest “invisible” distortions in global rice markets: a quirk of World Trade Organisation rules that obliges Tokyo to buy grain it does not need and effectively turns millions of tons of high-grade American rice into feed for Japanese pigs.
If that distortion were removed, said researchers at the Washington-based Centre for Global Development (CGD), and the 1.5 million tons of unwanted US rice were released from Japan’s storage silos, the crisis that has sent the price of the crop that feeds half the world would be instantly solved. Rice prices, suggested the group’s forecasts, could even halve between now and June.
Standing in the way of that, however, is a rule that prevents Japan from re-exporting its reserves of US rice without permission from Washington – permission that has not been forthcoming until now, but which The Times has learned may be just hours away from being granted.
Behind the sharp drop, which contributed to a 14 per cent collapse in the rice price over the week, were forecasts of a good harvest and suggestions that some of the recently imposed export restrictions on rice might be relaxed. Pakistan today said that it would allow 1 million tonnes of rice to be exported.
Traders warned, however, that many of the factors that have propelled rice prices to their recent highs remain in place. The destruction of Cyclone Nargis has effectively turned Burma from an exporter to the global rice economy to an importer and export restrictions from India and Vietnam remain firmly in place.
"Permission was not forthcoming from Washington, until now?"
:thinking
Wonder what that was all about?..the folks hit by the earthquake and cyclone perhaps?
Am guessing the amount is not large enough to make up for the shortages, but if it lowers the price in stores, that would be great!