Global Rice Price Surge Raises Food Security Concerns in ASEAN

by Ella

Over the past month, the ASEAN region, highly reliant on rice as a staple food, has grappled with soaring global rice prices, driven by climate-related disruptions such as floods, heatwaves, and other extreme weather conditions. The Food and Agriculture Organization’s All Rice Price Index reached 142.4 in August, marking a 31 percent increase from the previous year, exacerbated by a global rice shortage and export restrictions imposed by India since July.

The impact of rising global rice prices is felt in ASEAN nations, with Malaysia experiencing a shortage of locally produced rice, meeting only 70 percent of domestic demand. This has led to empty shelves in many supermarkets and small grocery stores as customers quickly purchase available 5 and 10-kilogram bags of local rice.


The Philippines has also implemented price controls, capping the maximum allowable selling price for consumers. However, this move has not been supported by sufficient rice reserves, exacerbating shortages.


Indonesia faces similar challenges as global rice prices surge. The rice price in Jakarta rose by an average of Rp 130 (0.8 cents) per kg in a matter of weeks.


To prevent panic buying, Indonesia has limited the purchase of subsidized rice to a maximum of two bags of 5 kg each in all modern retail outlets.


In response to global price fluctuations, ASEAN countries that serve as rice exporters, including Thailand, Vietnam, and Cambodia, tend to limit or reduce their rice exports as a precautionary measure. This was particularly notable after India imposed restrictions on rice exports in July to safeguard its domestic interests.

A crucial lesson from global food price fluctuations over the past two decades is that climate change, conflicts, and pandemics are underlying triggers of food price surges. These global shocks are challenging for individual nations to address. Protectionist policies can exacerbate crisis conditions.

For instance, a World Bank report from 2019 highlighted that protectionist policies during the 2010-2011 food crisis contributed significantly to the increase in world wheat and corn prices, resulting in increased poverty for millions.

Given the integrated nature of the ASEAN rice market, where price increases in one country affect others, it is essential for ASEAN member countries to prioritize a collective approach that considers the broader interests of ASEAN food security, particularly since the majority of member countries fall into the middle-income category and are particularly vulnerable to international food price spikes.

In this context, ASEAN has already made progress with the establishment of the ASEAN Plus Three Emergency Rice Reserve (APTERR) in 2012. This collaboration between ASEAN member countries and their external partners, including China, Japan, and South Korea, aims to address rice supply instability in the region and mitigate the impact of food crises.

However, there is room for improvement, as the APTERR primarily focuses on providing emergency rice supplies to countries facing acute shortages, rather than stabilizing rice prices and supplies, which was its primary objective.

To enhance food security in the region, ASEAN countries should reinforce their commitment to facilitating the trade of essential staple foods, such as rice, within the ASEAN region. This can be achieved through measures like expediting customs clearance cooperation, reducing non-tariff barriers, sharing information about rice stocks, and prioritizing rice needs for net-importing ASEAN countries during international rice price disruptions.



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