World’s rice reserves lowest in decades

By Catherine Mghendi
Current levels can only serve world for two months, and half of these held by China

The world’s rice reserves are at their lowest in more than two decades, and can only feed the world for two months in the event of an emergency, agricultural economists are warning.
By the end of June, the world had only 80.6 million tonnes of rice in its reserves, the lowest level since 1983-84, and half of these stocks are being held by China.

The Africa Policy Research and Advocacy Group of the Africa Rice Center (WARDA) last week expressed deep concern about the current world rice situation and its implications for sub-Saharan Africa (SSA).

“African rice economies will increasingly become exposed to unpredictable external supply and price shocks,” warns Dr Aliou Diagne, an economist at the Center.

World rice consumption continues to outstrip rice production, and rice prices are rising with projections they will double in a couple of years. The World Bank warns that current low levels of global reserves and escalating prices could unleash widespread food riots in Africa.

Dr Papa Abdoulaye Seck, Director General of the Africa Rice Center says Sub-Saharan Africa imports about 40% of its rice requirements, and is already contending with price hikes in Thailand and Vietnam, the traditional rice exporters to Africa.

With only 13% of world population, Africa accounts for 32% of world rice imports, which makes it a big player in the international rice trade. In 2006, SSA imported more than 9 million tonnes of rice worth an estimated US$ 2 billion.

Considering that only 7% of the total rice produced in the world is traded, WARDA Economist Dr Diagne says this supply is too limited for SSA to rely on for its growing rice demand. “SSA should urgently reconsider its rice import policy to avoid the looming crisis.”

Africa has an immense untapped potential for rice production. According to the Food and Agriculture Organization of the United Nations (FAO), the paddy (unhulled rice) production in Africa has gone up for the sixth consecutive year, reaching 21.6 million tonnes in 2006.

But with rice consumption in West Africa – the rice belt of Africa – doubling every 9 years, the challenge of keeping up with it is immense.

Africa Policy Research and Advocacy Group is urging African governments to strength support to small farmers who form the majority of rice producers in SSA. Smallholder rice farmers in the region have been facing unfair competition from subsidized rice imports.

Availability of cheap imported rice has until now provided a ready excuse for many Sub-Saharan African governments to neglect the domestic rice production. “In that sense, the rise in world rice prices is a golden opportunity for SSA, because this increases the competitiveness of the local rice sector,” says Dr Diagne.

Pascal Gbenou from the Network of Farmers’ and Agricultural Producers’ Organizations of West Africa (ROPPA) says rice continues to be one of the most protected commodities in every country except in West Africa.

His association wants the West African Economic and Monetary Union (UEMOA) to adopt higher levels of the common import tariff (TEC) for agricultural products, arguing the current TEC level is detrimental effect to the sub-region’s agricultural sector in general and on rice in particular. UEMOA’s Kolado Bocoum says they are reviewing the TEC issue to factor farmers concerns.

“Right policies are indeed essential to make African rice sector competitive,” says Dr Akande Oyetunji, Director General of the Nigerian Institute of Social and Economic Research (NISER). “We are witnessing how the recent rice policies adopted by Nigeria as part of the Presidential Rice Initiative have boosted the country’s rice sector”.

Nigeria’s rice production was nearly 4 million tonnes in 2006, 10% above the 2005 level. Moreover, Nigeria reduced its rice imports in 2005 by over 800,000 tonnes, as a result of strong measures taken by the government to increase domestic rice production.