Grain prices soar globally

Rice Run Prompts Curbs to Rival Credit Market Seizure (Update1)
By Marianne Stigset and Tony Dreibus

April 7 (Bloomberg) -- From Cairo to New Delhi to Shanghai, the run on rice is threatening to disrupt worldwide food supplies as much as the scarcity of confidence on Wall Street earlier this year roiled credit markets.

China, Egypt, Vietnam and India, representing more than a third of global rice exports, curbed sales this year, and Indonesia says it may do the same. Investigators in the Philippines, the world's biggest importer, raided warehouses last month to crack down on hoarding. The World Bank in Washington says 33 nations from Mexico to Yemen may face ``social unrest'' after food and energy costs increased for six straight years.

Rice, the staple food for half the world, rose 2 percent to a record $20.910 per 100 pounds in Chicago today, double the price a year ago and a fivefold increase from 2001. It may reach $22 by November, said Dennis DeLaughter, owner of Progressive Farm Marketing in Edna, Texas.

``Rice will gain substantially over the next two years,'' said Roland Jansen, chief executive officer of Pfaffikon, Switzerland-based Mother Earth Investments AG, which holds 4 percent of its $100 million funds in the grain. Governments will likely maintain curbs on exports ``because those countries want to be able to continue to feed their own populations,'' he said.

The upheaval parallels turmoil in global capital markets that seized up nine months ago when subprime mortgages collapsed. The difference between what it costs the U.S. government to borrow and the rate banks charge each other for three month loans ended last week at 1.36 percentage points. A year ago the gap was 0.33 percentage point.

Export Curbs

Rice growing nations are driving up prices for producers that want to sell abroad. The Vietnam Food Association said April 2 it asked members to stop signing export contracts through June, following China, which imposed a 5 percent tax on exports as of Jan. 1. Egypt banned rice shipments through October.

Prices ``are not coming back to the levels we came from,'' said Mamadou Ciss, head of Singapore-based rice broker Hermes Investments Pte Ltd. Vietnam's 5 percent broken-grain rice may be 40 percent higher within three months, he said.

Record grain prices are stoking inflation. Wholesale costs in India rose 7 percent in the week ended March 22, the fastest pace in more than three years, underscoring the threat from rising food costs, the Ministry of Commerce and Industry in New Delhi said April 4.

The increase may boost profits for suppliers. Padiberas Nasional Bhd. rose the most in seven years in Kuala Lumpur stock exchange trading last week. The company is Malaysia's only licensed rice supplier.

Commodity Rally

Goldman Sachs Group Inc. forecasts that all agricultural commodities it covers will rise during the next six months, except for sugar. Global cereal demand will expand 2.6 percent this year, 1.6 percentage points above the 10-year average, according to the Food and Agriculture Organization in Rome.

The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials gained for six consecutive years and advanced 15 percent this year.

``We have some very serious problems developing globally for food and energy,'' said Greg Smith, executive director of Global Commodities Ltd. in Adelaide, Australia, which manages $350 million.

World rice stockpiles are at their lowest levels since the 1980s, and the United Nations forecasts that exports will drop 3.5 percent this year.

Demand will increase 0.6 percent this year to 422.5 million tons, while production will rise about 1 percent to 422.9 million tons, the U.S. Department of Agriculture said March 11.

Grains Revolution

Rice yields globally expanded more than 40 percent from 1980 to 2000, according to data compiled by the USDA. They've increased only about 5 percent since then, the data show. Stockpiles will fall to 75.2 million tons, about half of where they were at the start of the decade, the USDA said.

``There's been no new technology revolution for the rice seed since the grains revolution in the 1970s,'' said Mehdi Chaouky, a London-based agricultural analyst with Diapason Commodities Management SA, which oversees $8 billion.

Some analysts say buyers in Thailand and Vietnam are hoarding grain and may release it in coming weeks, causing prices to drop. Another risk for speculators is that the increase will lead farmers to grow more crops. Wheat rose to a record $13.495 a bushel in February before dropping as much as 34 percent in the next five weeks, partly on expectations for more planting.

Curbing Exports

``There are lessons to be learned from what happened in the wheat market,'' said Darren Cooper, a senior economist with the International Grains Council in London. ``The market will adjust, and moving forward we will see some restrictions on demand.''

For now, governments are limiting exports to ensure they have enough food at home. Vietnam, the third-biggest rice exporter after Thailand and India, will reduce shipments 11 percent this year to 4 million tons, Prime Minister Nguyen Tan Dung said March 30.

``Bread is losing its place as the main staple food and rice is replacing it, and this created the problem,'' Ali Sharaf Eldin, chairman of Egypt's Chamber of Grains, said in an April 1 interview.

Investigators in Manila caught profiteers last month who were repackaging 20,000 fifty-kilogram bags of rice from subsidized government supplies for sale as higher-grade grain, according to Ric Diaz, an official at the National Bureau of Investigation.

`Social Tension'

The Philippines' state-run National Food Authority allows suppliers to sell at a subsidized price of 18.50 pesos (44.23 cents) per kilogram in low-income areas. People in the warehouse north of Manila were preparing to market the rice as a variety that sells for at least 35 pesos, Diaz said in a March 31 interview.

Drought is hurting plantings in China, where an estimated 19.4 million hectares (48 million acres) of arable land had been affected by March 26, according to Xinhua, the state news agency. Consumer prices in China, the world's fastest-growing economy, soared 8.7 percent in February, the most in 11 years.

``A constant price rise of rice can't be viewed as sustainable,'' said Abah Ofon, a commodities analyst with Standard Chartered Plc in Dubai. ``As with any staple commodity, there's a risk of social tension when prices begin to rise.''

bubbaguy wrote:
Meat may be cheap, but Christians should not eat it. God gave us "every seed bearing plant" for food in Genesis 1:29.
bub

There is no Biblical command that deals with abstaining from meat, merely because of the fall with Adam, however, eating vegetarian is not a bad thing either. Its personal preference and levels of consciousness.

The slaughtering or sacrifice of an animal does not fall into the commandment of "you shall not kill." For the purpose of survival, we need to kill plants and animals to eat. The Bible tells us how to kill the animal the right way in order to eat it.

Plants have souls and spirits too IMO, which refutes the vegan's argument that killing animals for consumption is wrong.

We should be elevating and making holy everything we do, this is why the Bible gives us the instructions on how to do that. Every aspect of our lives are covered in terms of instructing us how. Eating is such an important part of our daily lives that it is no wonder why there is a whole science behind the Biblical dietary instructions.

We should be mindful of how and what we eat, especially since God reveals to us the reasons why in the Bible.

The New Testament does not say that it is okay to eat any and all animals. The New Testament does say that all the laws of the Old Testament are still in effect. Which means, not any and all meat is okay to eat. The believer should be keeping the dietary laws for their health and for their spirit. :-)

China Cuts Fertilizer Sales; Philippine Tender Flops (Update1)
By Luzi Ann Javier and William Bi

April 17 (Bloomberg) -- China, the world's largest grain producer, raised taxes on fertilizer exports and the Philippines, the biggest rice importer, failed to fill a tender as record prices heightened concern the world is running short of food.

China will increase export duties on all fertilizers and some related raw materials to safeguard local supplies during the main growing season, the Ministry of Finance said today. The Philippines received offers for just two-thirds of the 500,000 metric tons of rice that it sought to buy at a tender.

Rice futures in Chicago surged to a record today, following gains in wheat, corn, palm oil and soybeans, which have all risen to their highest ever this year. The rally, including record crude prices, has stoked concerns inflation will rise and civil unrest may spread. The food crisis was of ``emergency proportions,'' United Nations Secretary-General Ban Ki-Moon said on April 14.

``The prices are just too high,'' Vic Jarina, the deputy director of the Philippines National Food Authority, said today after the rice-supply offers were announced. ``We will review the bids and decide whether we'll have more tenders.''

Rice, the staple food for half the world, rose as much as 57 cents, or 2.5 percent, to a high of $23.12 per 100 pounds (45 kilograms) on the Chicago Board of Trade. The contract, which has more than doubled in the past year, was at $22.985 at 4:47 p.m. Singapore time.

Civil Unrest

The World Bank has forecast that 33 nations from Mexico to Yemen may face social unrest after food and energy costs increased for six straight years. Haitian Prime Minister Jacques Edouard Alexis was voted out of office this month by the country's senate after violent protests over food costs.

Rice suppliers offered the Philippines 325,750 tons compared with the 500,000 tons tendered for, according to the tally from the National Food Authority. Prices were more than 40 percent higher than the last tender in March, which also fell short of requirements.

``We can't really cut down on rice because that's our main staple,'' Edwin Sudiacal, 31, a security guard in Manila, the Philippine capital, said today. He said he's forced to buy costlier rice at commercial outlets as there aren't enough state- subsidized supplies.

`Control Exports'

China's Finance Ministry said: ``If we can effectively control exports, we can ensure fertilizer needs for planting in spring, and curb the rising trend of domestic fertilizer prices.''

The increased taxes, which will boost the tariff range from 0 percent to 35 percent, to 100 percent to 135 percent, will apply from April 20 to Sept. 30.

If China effectively stops exporting fertilizers, it may be ``fatal'' for the global supply of some products, such as ammonium phosphate, Xu Hongzhi, an analyst at Beijing Orient Agribusiness Consultant Ltd., said before the ministry's announcement.

China also started to tax wheat exports at a rate of 20 percent this year, according to a December statement from the Finance Ministry. The tax for corn and rice was set at 5 percent.

Food-importing countries worldwide are cutting taxes to try to secure supplies. Turkey will abolish import duties on rice to counter speculation that has pushed prices up in recent weeks, Agriculture Minister Mehdi Eker said today.

Egypt, Africa's largest rice exporter last year, will reduce the land allocated for planting the grain to save water and encourage farmers to grow more corn, Agriculture Minister Amin Abaza said in an interview April 15.

Don't know if you have noticed the price changes, but we have.

Went shopping the other day.

I picked up the rice we usually buy. I said to my husband, 'How much does this rice normally cost?'

He said, '79p'

I said, 'I thought so. It's now £1.09p'

The cooking oil has doubled in price, and the flour has almost doubled in price.

Thing is for us westerners, we can still afford these prices, even if we don't like them.

I just wonder, concerning those involved in aid agencies and famine relief, if more people will die from hunger than the numbers that die on a daily basis when there is no food shortages.

Compliments,
Take everything bubbaguy says with a pinch of salt.

Including the meat!

God bless.

Sam's Club, Costco limit rice purchases as prices rise
The move comes as U.S. rice futures hit a record high amid global food inflation

(AP) -- The two biggest U.S. warehouse retail chains are limiting how much rice customers can buy because of what Sam's Club, a division of Wal-Mart Stores Inc., called on Wednesday "recent supply and demand trends."

The broader chain of Wal-Mart (WMT, Fortune 500) stores has no plans to limit food purchases, however.

The move comes as U.S. rice futures hit a record high amid global food inflation, although one rice expert said the warehouse chains may be reacting less to any shortages than to stockpiling by restaurants and small stores.

Sam's Club followed Seattle-based Costco (COST, Fortune 500) Wholesale Corp., which put limits in at least some stores on bulk rice purchases.

Sam's Club declined to say if this is first time it has restricted sales of bulk foods. The limits affect 20-pound bags, not retail-sized portions. Costco President and CEO Jim Sinegal declined to discuss the issue Wednesday with an AP reporter.

Sam's Club said it will limit customers to four bags at a time of imported jasmine, basmati and long grain white rice.

Higher prices ahead
The warehouse chain caters heavily to small businesses, including restaurants. Sam's Club spokeswoman Kristy Reed said she could not comment on whether the problem was caused by short supplies or by customers stocking up in anticipation of higher prices.

USA Rice Federation spokesman David Coia said there is no rice shortage in the United States.

"It's possible that small restaurants and bodega-type neighborhood stores may be purchasing rice in larger quantities than they do typically to avoid higher prices," Coia said about the warehouse chain restrictions.

A smaller chain, Natick, Mass.-based BJ's Wholesale Club (BJ, Fortune 500), said it is not imposing limits for now.

"At the present time, BJ's Wholesale Club is not limiting the amount of rice purchases made by our members, but, due to the current market situation, that could change at any time," spokeswoman Sharyn Frankel said in a statement.

In New York's Chinatown, shop owners said that they haven't seen people stocking up amid fears of rice shortages.

At Bangkok Center Grocery, one of the main suppliers of Thai food products in New York City, manager Tom Pongsopon said the price of a 25-pound bag of Jasmine rice at his Chinatown store has gone up from $15 to $20 in a matter of months.

"We have enough for now, but I'm not sure about the future," Pongsopon said.

The Sam's Club restriction is effective immediately at all locations where quantity restrictions are allowed by law. It does not apply to other staples such as flour or oil.

"We are working with our suppliers to address this matter to ensure we are in stock, and we are asking for our Members' cooperation and patience," Reed said in a statement.

Sam's Club has 593 stores compared with 2,523 Wal-Mart Supercenters that combine a full grocery section with general merchandise.

Costco has 534 warehouses worldwide, most of them in the United States.

Wal-Mart spokeswoman Deisha Galberth said Wal-Mart stores have no plans for restrictions similar to those at Sam's Club.

"We are not seeing any signs of concern in the supply chain that would cause us to limit the sales of any items," Galberth said.

Investors react
U.S. rice futures soared to an all-time high Wednesday as investors bet that surging world demand will continue to pressure already dwindling stockpiles. Rice for the most actively traded July contract jumped 62 cents to $24.82 per 100 pounds on the Chicago Board of Trade, after earlier rising to a record $24.85.

Relentless demand from developing countries and poor crop yields have pushed rice prices up 70 percent so far this year, raising concerns of severe shortages of the staple food consumed by almost half the world's population.

The steep increases have followed similar jumps in the price of wheat, corn and soybeans that have added to Americans' growing grocery bill and led to violent food riots in poor countries including Haiti, Senegal and Pakistan.

Most of the rice eaten in the world is consumed within 60 miles of where it was grown, said Nathan Childs, an economist and rice expert with the U.S. Department of Agriculture. Traditionally very little of it was traded in the world market.

But as populations crossed borders, the taste for specialty rices such as the Indian basmati, or Thai jasmine rice, which grow only in their areas of origin, spread.

U.S. production of long grain and medium grain rice is strong, and the global crop is larger than ever, Childs said. But with some of the principal exporters of the higher-priced rices, such as India and Vietnam, shunning foreign sales to control prices at home and the cost of food generally going up, the price of rice has been climbing to new heights.

What adds to the price spike -- and the run on specialty products like basmati -- is that rice consumers tend to be very loyal. The market is highly segmented by type of rice and quality, and buyers will generally not take a substitute, Childs said.

"California's had a pretty good crop, but basmati and jasmine consumers have a history of not switching," he said. "They could always have bought cheaper Calrose. But they don't."

A friend told me yesterday, that the price of a 40 lbs bag of dog food he buys at Agway, went from $26 to $40.

In Christ
Jeff

enid wrote:

Compliments,
Take everything bubbaguy says with a pinch of salt.

Including the meat!

God bless.

Especially when he is quoting scripture when folks were under the Law. We are no longer under the supervision of the law.

You have been writing about the 'shortage' of grains...there is also another issue that deeply concerns me and that is the way scientists are promoting GMO seeds onto the farmers with great promises of increased production. But it has the critics declaring the resulting fruit is inferior nutrition-wise. Some would even say that if wild animals are offered the choice they will leave the GMO grain for the natural grain.

"USA Acres", a magazine devoted to organic farming and sustainable agriculture is no big friend of the mammoth Agri-business and the chemical industry...and they have been sending the alarm for a long time....wonder how or if these issues are related?

Here are some links:
http://www.pbs.org/newshour/bb/science/jan-june00/food_4-4.html
http://todayyesterdayandtomorrow.wordpress.com/2007/06/10/censored-news-independent-study-points-to-dangers-of-gm/

Or, just google ‘danger of using GMO grains’ and you will learn more then you ever wanted to know.

Perhaps the chickens are coming home to roost?

ginnyrose

Wall Street Grain Hoarding Brings Farmers, Consumers Near Ruin
By Jeff Wilson

April 28 (Bloomberg) -- As farmers confront mounting costs and riots erupt from Haiti to Egypt over food, Garry Niemeyer is paying the price for Wall Street's speculation in grain markets.

Commodity-index funds control a record 4.51 billion bushels of corn, wheat and soybeans through Chicago Board of Trade futures, equal to half the amount held in U.S. silos on March 1. The holdings jumped 29 percent in the past year as investors bought grain contracts seeking better returns than stocks or bonds. The buying sent crop prices and volatility to records and boosted the cost for growers and processors to manage risk.

Niemeyer, who farms 2,200 acres in Auburn, Illinois, won't use futures to protect the value of the crop he will harvest in October. With corn at $5.9075 a bushel, up from $3.88 last year, he says the contracts are too costly and risky. Investors want corn so much that last month they paid 55 cents a bushel more than grain handlers, the biggest premium since 1999.

``It's the best of times for somebody speculating on grain prices, but it's not the best of times for farmers,'' said Niemeyer, 59. ``The demand for futures exceeds the demand for cash grains.''

Commodity investors control more U.S. crops than ever before, competing with governments and consumers for dwindling food supplies. Demand is rising with population and income gains in Asia, while record energy costs boost biofuels consumption, sending grain inventories to the lowest levels in two decades.

Fund-Buying Gains

Index-fund investment in CBOT corn, soybeans and wheat has increased 66 percent to the equivalent of 902,105 futures contracts, a record, since January 2006, when the government began collecting the data. Each contract represents 5,000 bushels, about what Niemeyer reaps from every 22 acres of corn planted.

Investments in grain and livestock futures have more than doubled to about $65 billion from $25 billion in November, according to consultant AgResource Co. in Chicago. The buying of crop futures alone is about half the combined value of the corn, soybeans and wheat grown in the U.S., the world's largest exporter of all three commodities. The U.S. Department of Agriculture valued the 2007 harvest at a record $92.5 billion.

(end of partial article)

In the various Asian countries it is against the law to hoard grain like rice and wheat. The penalty for this crime is life in prison.

In America, Wall Street is responsible for tying up over half the crops of wheat, corn, and soybean that will be grown this year...speculating that demand will increase and thus handsome profits are likely...

This reminds me of this Scripture...

James 5:
1 Come now, you rich, weep and howl for your miseries that are coming upon you! 2 Your riches are corrupted, and your garments are moth-eaten. 3 Your gold and silver are corroded, and their corrosion will be a witness against you and will eat your flesh like fire. You have heaped up treasure in the last days. 4 Indeed the wages of the laborers who mowed your fields, which you kept back by fraud, cry out; and the cries of the reapers have reached the ears of the Lord of Sabaoth. 5 You have lived on the earth in pleasure and luxury; you have fattened your hearts as in a day of slaughter. 6 You have condemned, you have murdered the just; he does not resist you.

Do you see how the love of mammon murders the just? People are starving because the price of rice has doubled in just 5 weeks.

In Christ
jeff

the reason you're seeing these "signs" are a confluence of several events coming together to make the perfect storm:

1. Peak Oil- even though the price is flirting with $120 a barrel, you're not seeing new production come on-line.

http://www.nytimes.com/2008/04/29/business/worldbusiness/29oil.html?hp=&pagewanted=all

also both the weakness of the dollar, and the Mid-East powder keg are playing a key role in driving the price even higher.

2. Massive drought in Australia, multi year drought. Australia is(was) one the leading exporters of wheat. The world-wide supply/demand margin has been razor-thin for years now, with Australia out of the mix......also we grew a record crop of field corn last year, 13.1 billion bushels, but whereas corn would be trading at 1.00 to 1.50 a bushel given this crop, its trading at record prices between 5.50 and $6 a bushel. Why? because of the enormous demand for ethanol, instead of putting this corn into cattle and hogs, or making corn syrup, we're a lot of corn into our gas tanks.

World Ag Supply and Demand
http://www.usda.gov/oce/commodity/wasde/

US agriculture stat's
http://www.nass.usda.gov/index.asp

Not to mention the fact, in 07, farmers took acreage OUT of soybeans and wheat, and put it into corn. '08 is different, the farmers planted more bean and wheat acreage and took it out of corn. The futures markets are so volatile a farmer cant even hedge his crop anymore, not to mention the fact, that most of his "inputs", fertilizer, are petroleum based. If we have weather disruptions in the US this growing season, hold on, it will get worse.

3. India and China-if you read the above article, we now have about a billion more people in those countries enjoying a "middle class" existence, and they want to drive cars and eat beef too......AND rice.

4. The dollar, thanks to the disaster of subprime mortgages, the Federal Reserve has been using the printing press to make more dollars to provide liquidity, ie bailing out Bear Stearns. (which was smart, short term, if Bear failed, we could have faced a real panic and meltdown in the financial markets) So, when you increase the supply of something, paper dollars, their value is going to go down. The whole oil market is priced in dollars, and there is a move afoot to switch to Euro's. Which could happen. Remember there was a day when the British Pound was the world currency. The war in Iraq isnt helping either. The govt can throw $600 to an individual or $1200 to a family, and they the word that they send out is "spend spend spend!", but most people will pay down debt, or save. Point being, the average American does NOT save, we are taught to consume.

But Jesus Christ our Lord and God the Father also gave us wisdom, and encourages us via the Holy Spirit, not to fear. and in that spirit, let me put a website that has been of great value to me. Before I put it up, let me say that the man who runs it, James Wesley Rawles, is a born-again Christian who loves the Lord, a God fearing man, and a good man, not some weirdo spewing race hate or weird doctrine, just good solid advice on preparing for any contigency.

www.survivalblog.com

in the section, categories, you will find one "Christianity", you will also find another "Charity". Jim believes that even if times get rough, we should not lose who we ARE in the Lord. on this webiste,there are many many great resources for making preparations, if things get ugly.....

Krispy, Jim has an Army background, and says what you say, to which I agree 110%;

put your trust in Jesus, but some wisdom and preparation are in order too. (btw, Jim is a big proponent of the home-schooling movement.

The Lord bless you and keep you,
Hosiah