Rising rice prices in Laos � a reminder of 2008 global food crisis

(KPL) Lao consumers start to feel the impact of sharp spikes in the price of rice, the staple food of Laotians, as a result of delayed rains and the possibility of a much reduced harvest this year, according to a press release of FAO�s Lao station, on 27 July. Data collected by the Ministry of Planning and Investment showed that the average price of rice in June 2010 was 7,700 kip per kilogram (approx. USD 0.95) � a figure that breached the price of rice during the peak period of the Global Food Price Crisis, September 2008. While the price of rice shot up to a high level in Laos but in Thailand the price of rice for export plummeted, from its high of USD 618 per tonne in December 2009 to its rock bottom price of USD 464 per tonne in July 2010. Because the prices of rice had been roller coasting over the past few years, the United Nations Food and Agriculture Organisation (FAO) had taken the initiative to monitor its price movement. �Given that the general consumer price inflation here in the Lao PDR had been relatively low in 2009, rising rice prices put extra burden on those with low incomes,� said Dr Kisan Gunjal, an FAO Food Emergency Officer, towards the end of his visit to the Lao PDR. Retail price of normal rice, national average in kip/kg The June average price of rice skyrocketed by as much as 13 percent from the post-harvest low in November 2009. Comparing this sharp price hike to seasonal patterns of previous years, especially 2009, which was a more normal year, it appeared that there was an earlier occurrence of a spike in the price and this showed that it was more than just the normal seasonal price fluctuation. Seasonality of retail prices of normal rice �The price of a kilo of rice in Vientiane markets varies a great deal, depending on the quality and source of the commodity,� said Serge Verniau, FAO Representative in the Lao PDR. �We need to watch the gyrations of prices of rice very carefully,� he added. It was reported that the Government released some rice from its reserve stock last Friday, but up to date its impact on the price of rice remained uncertain.