Rice is headed for the largest weekly price drop in nearly four years as the possibility of exports from Pakistan, Japan, and India help ease supply fears. Pakistan has met their own needs and now is ready to export, Japan is in talks with the Philippines to send shipments, and India hopes to harvest a bumper crop. The supply shortage has also prompted increased planting of rice across the world.
Rice prices had hit record highs last month partly because some exporters, such as India and Vietnam, drastically cut exports to feed their own people. High fuel costs also contributed to the rise. From Bloomberg:
“Rice prices appear to have already peaked,” Kazuhiko Saito, a strategist at Interes Capital Management Co. in Tokyo, said by phone today. “Some exporters may resume their sales before producers in Asia harvest new crops.”
Rough rice for July delivery fell as much as $1.02, or 5 per cent, to $19.32 per 100 pounds, the lowest since April 2, on the Chicago Board of Trade. The contract, which reached a record $25.07 on April 24, traded at $19.705 as of 10 a.m. in London.
“The wheels are in motion for lower food prices,” John Reeve, associate director for agricultural commodities at UBS AG, said today in an interview on Bloomberg Television. Farm output costs were below selling prices and harvests were due, he said.
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