ASEAN KEY DESTINATIONS
Indonesia boosts rice inventory
Indonesia ordered hefty rice imports on Wednesday to boost stocks by a third in the latest sign that countries concerned about rising food prices and short supplies are rushing into the market and could drive inflation even higher.
Global food prices have climbed to record highs on shrinking supplies of wheat, corn, soybean and oilseeds. While rice has been less of a worry thanks to ample supplies in the top two exporters, Thailand and Vietnam, traders said other Asian governments may soon seek to boost rice stocks too.
China plans subsidies to boost grain output this year, state radio said in a report on its web site.
The chairman of Australia's main sugar industry group Canegrowers said up to a quarter of the sugar cane crop in the state of Queensland may have been lost.
The latest monthly grains report from the United States government threatened to further stoke concerns over crops being increasingly used for fuel. The US Department of Agriculture slashed its forecast for corn stockpiles 9 percent, projecting the tightest supply since the Great Depression as a record amount of the crop is used to make ethanol.
Problems with Australia's wheat crop as well as lingering effects of last summer's drought in the Black Sea region have boosted the role of the United States on the export market.
In January, global food prices tracked by the United Nations Food and Agriculture Organization hit their highest level on record. The FAO said last week its Food Price Index rose for the seventh month in a row to reach 231 in January, the highest level since records began in 1990.
The rising prices have raised concerns over inflation, protectionism and social unrest, factors behind the 2008 food crisis, and prodded the G20 to promise action.
Indonesia's government met to discuss food security on Wednesday. Chief Economic Minister Hatta Rajasa asked state procurement agency Bulog to secure imports to gradually boost rice stockpiles to 2 million tons from the current 1.5 million tons, underlining fears shortages could cause price spikes.
Traders said other governments may also look to increase stocks despite ample supplies in Thailand and Vietnam.
Bangladesh said it was buying 200,000 tons of parboiled rice from Thailand in their first government-to-government deal for the grain.
The Philippines, however, held back on importing more despite a recommendation by a government panel to build stocks above a 1 million ton target.
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