rice stories from Japan that will make you grit your teeth

http://www.atimes.com/atimes/Global_Economy/JG18Dj02.html


Japan ducks rice-crisis solution


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The world rice market remains in crisis. Export prices soared to US$1,100 per ton in April, from $375 per ton in December <1>. In April, there was concern that if action was not taken, prices might double again, returning them to stratospheric real levels last seen during the crisis in 1973-74.

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How can this be done? After India banned all non-basmati rice exports in February, Vietnam largely withdrew as a seller from the export market (this month, when exports resumed), and Thailand struggled to maintain rice exports at last year’s near-record level, which required drawing down government-held stocks. As a result, the new rice supplies must come from a non-traditional source. Fortunately, such a source is available: unwanted rice stocks in Japan.

Because of its World Trade Agreement commitments (made under the Uruguay Round of talks), Japan imports a substantial amount of medium-grain rice from the US and long-grain rice from Thailand and Vietnam. Tokyo, however, seeks to keep most of this rice away from Japanese consumers (perhaps fearing a realization that the taste of foreign indica rice is not so bad, and a bargain compared with the $3,900 per ton for locally produced short-grain varieties of japonica rice).

Under WTO rules, the government cannot re-export the rice, except in relatively limited quantities as grant aid. So the Japanese government simply stores its imported rice until the quality deteriorates to the point that it is suitable only as livestock feed and sells it to domestic livestock operators. Last year, about 400,000 tons of rice were disposed of in this manner, at a huge budget loss and displacing an equal quantity of corn exports from the US, thus displeasing another constituency, US corn growers

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The US was reluctant to take the lead in giving Japan permission to re-export its WTO rice, out of fear of potential political repercussions from the US rice industry. Re-exporting the rice from Japan would mean additional competition for US rice exports. But at the moment, there is no competition - that is precisely the problem.

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Olympic Rice

Alternatively, Beijing could launch its own food aid program to help the world’s poor - they could call it "Olympic Rice" - and make their first donation to Myanmar. This rice could be shipped overland from China, avoiding the logistical nightmare caused by the sinking of 70 ships in the Yangon area during the typhoon. Word from senior Chinese policy analysts is that such a decision could only come at the "very highest level". Some subtle behind-the-scenes US diplomacy could play a positive role here, although a more aggressive supply offer from Japan might be even more helpful in stimulating the Chinese to take action. These two countries compete on the global political stage as well as in its markets.
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