MANILA, Philippines—Rice yields in the Philippines are nearly double those of Thailand, the world’s top exporter, yet as in Indonesia “there is just not enough land,” said Robert Zeigler, president of the International Rice Research Institute (IRRI).

The Philippines and Indonesia combined have nearly 300 million mouths to feed and are among the most vulnerable consumers of the grain as inflation-adjusted rice prices recently spiked close to historical highs.

The Philippines has imported rice almost every year since 1869, while Java, Indonesia’s most populous island, has been an importer since the 16th century, according to IRRI economist David Dawe.

“I hope that if the situation becomes tight in the Philippines, the Filipinos will not point fingers at the Filipino rice farmer,” Zeigler said at IRRI headquarters in Los Baños, Laguna.

Rice is the staple of half of humanity but only a handful of countries have large rice surpluses, leaving even some of the biggest producers scrambling to grow enough to feed their own people.

Land endowment determines which countries have enough of the cereal, the rice experts said.

Thailand, India, Vietnam, Burma (Myanmar), Cambodia and Bangladesh are all blessed with broad riverine deltas and plains with huge tracts suitable for rice farming, and allot more than half of their arable land to it, Dawe said.

Rice importers by contrast are island or peninsular nations with more varied landscapes favoring maize, palm oil or coconut.

Hoarding

Another problem facing consumers in the Philippines is hoarding by traders creating a supply shortage in the market and sending prices up.

President Gloria Macapagal-Arroyo has said the government will clamp down on rice hoarders who artificially hike prices.

The Philippines is a “price sensitive nation” that feels the strains of pressures from a globalized economy, Ms Arroyo said.

“I am asking traders not to jack up prices just because there is a crisis,” she said recently.

High population growth

The country’s high population growth is also putting pressure on rice supply.

Leocadio Sebastian, executive director of Philippine Rice Research Institute (PhilRice), said rice production had been increasing but could not catch up with the growing population.

Sebastian said in Muñoz, Nueva Ecija, that the total rice production was 14.6 million metric tons (MT) in 2005, 15.3 million MT in 2006 and 16.3 million MT in 2007. The projected harvest this year has been placed at 17.2 million MT, he said.

But the country’s population is growing at a faster rate. It was 60.7 million in 1990, 76.3 million in 2000, 82.6 million in 2004, 86.2 million in 2006, 88.7 million in 2007, and 90.4 million projected for 2008.

“That’s why we are importing rice,” Sebastian said.

Unfortunately, the rice supply in the world market has not improved while the demand for rice from other countries is also growing, he said.

Thin global supply

Just 30 million to 35 million metric tons, or 7 percent of the world’s annual rice harvest, is traded in the world market, and because the volumes are so thin they are subject to price shocks.

Because of the thinning supply in the world market, rice traders naturally take advantage of the best offer for bigger profits, Sebastian said.

He said rice-exporting countries were offering their supply on an “open bidding” basis.

China’s state secret

China is the world’s largest producer and consumer and also has the highest yields, but is not a key player in the export market, Zeigler said, adding that China guards its rice reserve levels as a “state secret.”

“China like any government is extremely concerned that their people have enough to eat, and so they are not going to export until they’re sure they have enough to eat,” he said.

An unlucky confluence of events has pushed spot prices close to $1,000 per ton, levels not seen since the scientific breakthroughs of the “green revolution” in the early 1980s boosted yields and had since then helped keep prices below $400 a ton.

Adverse weather in Bangladesh, pests and disease in Vietnam, and political problems in Burma—until the 1950s the world’s top rice exporter—have cut stocks usually available in the international market, Zeigler said.

Burma as swing producer

Burma could be a big swing producer, but has “great difficulty buying fertilizer in the world market because of the (international trade) embargo. If it could get fertilizer and improve its rural infrastructure a bit it could be a big player,” Zeigler said.

There was also some potential for large mechanized farms to grow rice in parts of southern Brazil and southern Argentina as well as Uruguay and Paraguay.

“They could conceivably come into the market but I don’t know that they’re going to be large players. They’re temperate zones and they only get one crop a year,” Zeigler said.

Biofuel industry

The biofuel industry could also make maize and soybeans more attractive, Zeigler added.

While rice is not used to produce ethanol for biofuel, the diversion of other grains toward biofuel can affect the supply of other cereals and further add pressure to supply and price.

“In the US, maize is going into ethanol big time. We have some land in Asia that is being redirected toward biofuel—certainly a lot of interest in converting some good land into oil palm plantations for biodiesel. That’s a concern,” Zeigler said.

Corn and soybean production made more sense for South America “because the prices are much better and more stable,” he said.

But this did not lead to optimism about rice production in an already tight market.

“In general there’s just not much room for areas of growth in the world for rice,” the IRRI president said. Reports from Agence France-Presse and Anselmo Roque, Inquirer Central Luzon