News

May 11, 2008

Market Roundup: The Squeeze Is Still On Rice, Soybeans And Grains

By Sally White

Rice was again headline news, as the devastating cyclone in Burma destroyed crops there. Rice prices surged on speculation that Myanmar may be transformed from a net exporter on the international market into a buyer. Rice jumped 9.7 per cent on the Chicago Board of Trade, and is now trading at more than double the price it was at a year ago. “The cyclone damage in the country has again highlighted tight global supplies of rice”, said Kenji Kobayashi, an analyst at Tokyo broker Kanetsu Asset Management.

Rice futures for July delivery rose 62.5 US cents, or 2.8 per cent, to US$22.975 per 100 pounds in Chicago, after earlier reaching the exchange's daily limit when it rose by US$1.15 to US$23.50. The trading limit was increased twice in the week. However the price is still slightly below the US$25 peak reached in April.

In response to the high price, on 7th May Nigeria, the world's second-largest rice importer, suspended levies on imports for a period of six months...