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February 2011 Commodity news and trends


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The eight month rise in export rice prices was not an upswing, but more of a correction, bringing rice prices back to their level at the start of 2010. They remain way below the spike they reached in the middle of 2008.

Rice production around the world is, for the most part, consumed locally rather than exported. The production-consumption link is the strongest in the most rapidly growing economies in the world, China and India, so the impact of rice price rises is on domestic costs in these countries (with the attendant political impact) rather than their agricultural trade balances.

The increasing spread of new agricultural practices in rice growing over the last 2-3 years has meant increases in rice yields, so population movements to the cities have not resulted in a corresponding reduction in rice production, and possibly large increases in rice prices have been moderated.

Also a factor: increased exports of rice from the United States, where the adoption of new mechanised production techniques is the most advanced.

The slower pace of urbanization in Vietnam has kept its rice employment strong, and Vietnam will continue to make a strong contribution to world rice exports.

The overall expectation is that the upswing in the prices of many types of food will not be as strong for rice. This is very important, because rice will continue to be the major source of calories for half the world's population.



Focus in this issue: Malaysian hardwood Archives
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