The world’s food problem is already severe as prices jump and protectionism flares but there is a good chance governments can stop it from becoming way worse if they heed a lesson from the crisis in 2008: don’t panic.
With a gauge of global prices already at a record after Russia’s invasion of Ukraine, several nations have moved to curb exports in crops, from wheat and sugar to cooking oils, exacerbating security risks for the rest of the world.
Bad weather is a concern, too. Still, while wheat, corn and soya prices have increased steeply while rice, a staple for more than three billion people, has been more stable.
If nations do not panic or start hoarding, they can stop the current crisis from becoming a rerun of the one in 2008, when rice prices rose and put the region’s food security at serious risk, said Peter Timmer, professor emeritus at Harvard University, who has studied food security for decades.
“The 2008 lesson is: do not spook the market,” said Mr Timmer, who worked with Asian governments on their policy responses during that food crisis. “Be careful whatever you do on rice imports, on exports, on controls.”
The stakes could not be higher. Policymakers from the US to China are grappling with elevated inflation and slowing growth, while consumers face fast-rising costs of living and hunger is spreading.
Rice — about 90 per cent of which is produced and consumed in Asia — is one of the most important crops.
The 2008 crisis provides critical lessons as it underscores how government-imposed trade shocks can supercharge commodity prices.
Rice’s surge back then was mainly because of bans on exports by major producers, notably India and Vietnam, due to domestic shortages and rising prices. That sparked panic buying in other countries, especially the Philippines, creating a ripple effect.
There are some similarities today. Rising energy prices, bad weather and export bans contributed to the current upswing in food prices, as they did back then, although the war in Ukraine adds a critical new dimension.
This year, as agricultural prices jumped, several governments have moved to protect their own supplies: Indonesia restricted palm oil exports, Malaysia banned chicken flows while India is limiting both wheat and sugar sales.
While there are concerns rice could be next in line, given that it is absolutely critical to food security and political stability in Asia, there are also differences from 2008.
Countries have both diversified their eating habits and built up huge buffer stockpiles in a bid to prevent price shocks, Mr Timmer said.
Rice is in such abundance to the extent that it could help ease the pressure on wheat, which hit a record in March.
Consumers in India, China and South-East Asia can switch relatively easily from wheat to rice — such as in noodles and cakes — saving the market about 30 million to 40 million tonnes of wheat, Mr Timmer said.
“You could take the heat off the wheat market, you put a little bit of heat on the rice market,” he said.
While that might cause rice prices to climb by 10 per cent or even 20 per cent, “that is not a rice crisis. That is the rice market adapting to a reality that everyone is going to have to live with for a year or two", he said.
Nevertheless, there is a risk Vietnam may restrict exports as authorities are worried about the impact of high fertiliser costs on yields at a time when drought has threatened crops in the Mekong Delta, said Mr Timmer.
The nation curbed exports in the 2008 crisis, after a similar move by India.
“You certainly could see Vietnam say: ‘We have to be careful we don’t starve our own people’,” he said.
UAE currency: the story behind the money in your pockets
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Profile
Company: Justmop.com
Date started: December 2015
Founders: Kerem Kuyucu and Cagatay Ozcan
Sector: Technology and home services
Based: Jumeirah Lake Towers, Dubai
Size: 55 employees and 100,000 cleaning requests a month
Funding: The company’s investors include Collective Spark, Faith Capital Holding, Oak Capital, VentureFriends, and 500 Startups.
The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
Mohammed bin Zayed Majlis
Company%20profile
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MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
Tips for used car buyers
- Choose cars with GCC specifications
- Get a service history for cars less than five years old
- Don’t go cheap on the inspection
- Check for oil leaks
- Do a Google search on the standard problems for your car model
- Do your due diligence. Get a transfer of ownership done at an official RTA centre
- Check the vehicle’s condition. You don’t want to buy a car that’s a good deal but ends up costing you Dh10,000 in repairs every month
- Validate warranty and service contracts with the relevant agency and and make sure they are valid when ownership is transferred
- If you are planning to sell the car soon, buy one with a good resale value. The two most popular cars in the UAE are black or white in colour and other colours are harder to sell
Tarek Kabrit, chief executive of Seez, and Imad Hammad, chief executive and co-founder of CarSwitch.com
Tips to avoid getting scammed
1) Beware of cheques presented late on Thursday
2) Visit an RTA centre to change registration only after receiving payment
3) Be aware of people asking to test drive the car alone
4) Try not to close the sale at night
5) Don't be rushed into a sale
6) Call 901 if you see any suspicious behaviour
UAE currency: the story behind the money in your pockets
The Details
Article 15
Produced by: Carnival Cinemas, Zee Studios
Directed by: Anubhav Sinha
Starring: Ayushmann Khurrana, Kumud Mishra, Manoj Pahwa, Sayani Gupta, Zeeshan Ayyub
Our rating: 4/5
Diriyah%20project%20at%20a%20glance
%3Cp%3E-%20Diriyah%E2%80%99s%201.9km%20King%20Salman%20Boulevard%2C%20a%20Parisian%20Champs-Elysees-inspired%20avenue%2C%20is%20scheduled%20for%20completion%20in%202028%3Cbr%3E-%20The%20Royal%20Diriyah%20Opera%20House%20is%20expected%20to%20be%20completed%20in%20four%20years%3Cbr%3E-%20Diriyah%E2%80%99s%20first%20of%2042%20hotels%2C%20the%20Bab%20Samhan%20hotel%2C%20will%20open%20in%20the%20first%20quarter%20of%202024%3Cbr%3E-%20On%20completion%20in%202030%2C%20the%20Diriyah%20project%20is%20forecast%20to%20accommodate%20more%20than%20100%2C000%20people%3Cbr%3E-%20The%20%2463.2%20billion%20Diriyah%20project%20will%20contribute%20%247.2%20billion%20to%20the%20kingdom%E2%80%99s%20GDP%3Cbr%3E-%20It%20will%20create%20more%20than%20178%2C000%20jobs%20and%20aims%20to%20attract%20more%20than%2050%20million%20visits%20a%20year%3Cbr%3E-%20About%202%2C000%20people%20work%20for%20the%20Diriyah%20Company%2C%20with%20more%20than%2086%20per%20cent%20being%20Saudi%20citizens%3Cbr%3E%3C%2Fp%3E%0A
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
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