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Growing appetite for rice pushes prices
KENYA - Kenyan consumers will be hit hard by rising rice prices in coming years if the country continues to consume amounts well above its small production.
Rice prices on futures markets have almost reached a 20-year high, just shy of $290 per metric ton.
The high prices come after years of declining global rice stocks, as major producers China and India switch to growing other crops to feed animals at the same time as other nations eat increasing amounts of rice.
“We’re eating more rice than we grow,” says Dr Robert Zeigler, director general of the International Rice Research Institute in Manila. Global rice stocks are now well below 100 million tons.
Kenya produces around 50,000 metric tons of rice, according to IRRI estimates, but it imports four times this amount of polished rice, mostly from Pakistan, making it highly vulnerable to market trends.
And while domestic production is increasing slightly, it is a long way from catching up with growing appetite for the crop, which is forecast to keep rising alongside urbanisation.
“We’re projecting per capita consumption in Kenya to reach 11kg in 2015, up from 7kg in 2005. If you add population growth to that, consumption is going to more than double,” Dr Zeigler told Business Daily. Consumption could be stymied by higher prices however. With little hope for replenishing stocks, high prices are expected to become the norm for several years to come.
“There is nothing on the horizon that tells us prices should drop. With stocks drawn down to the levels they are today, and the land available for rice planting set to decline by a few per cent each year, we’re going to have get significantly more out of that reduced area before prices can come down.”
Kenyan consumers may start to buy less rice or reduce their spending on other foods to compensate for higher prices, believes Dr Zeigler. The impact is expected to be similar across Sub-Saharan Africa, the world’s fastest growing rice consuming region.
Regular rice meals are a recent phenomenon in Africa, driven primarily by increasing urbanisation and a change in daily routines. For office workers, rice is easy and quicker to prepare than traditional grains like maize. It is also easy to store and transport. But the region relies on imports for 40 per cent of consumption.
High rice prices could however change government attitudes to the crop and bring more investment to boost production. “Rice in East Africa is potentially a cash crop.
Source: Business Daily Africa
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