WEDNESDAY, FEBRUARY 2. '011
HICAGO: United States farmers are planting the fewest acres with rice since 1989 just as global demand surpasses production for the first time in four years.
C
driving
prices
as
much
as 12 per cent higher by December, Bloomberg reported on Tuesday. Plantings in the US, the third-biggest shipper, may drop by 25 per cent this year because growers can earn more from corn and
soybeans, according to the median in a Bloomberg survey of nine analysts and farmers. Rice, the staple food for half the world, declined four per cent last year, extending a 2.9 per cent drop in 2009. The other crops jumped by 34 per cent or more.
"Why would you want to take that risk to plant rice, knowing that your income is going to be way down?" said Mr. Terry Hatley, a farmer in Marked Tree, Arkansas, who may not plant any rice this year after growing the crop for more than three decades. "Farming is a business,
and you've got to look at the
Rice rebounds as US crop shrinks economics of it. Now, the economics on rice are very
dim," Hatley added. Bangladesh, South Asia's biggest buyer, doubled a target for imports in 2011 to curb prices, the Directorate General of Food said last week. The Philippines, the world's largest importer, will probably start buying next month, according to the National Food Authority. While global stockpiles are predicted to be 26 per cent higher this year than in 2007, consumption will gain 3.4 per cent and harvests 2.6 per cent, the US Department of Agriculture estimates. The Thailand export price, the benchmark in Asia, may climb as high as $600 a metric tonne by December from $534 on January 26, a gain of 12 per cent, according to the median estimate in a Bloomberg survey of eight traders, exporters and analysts. "The acreage war has begun," said Mr. Dennis Delaughter. owner of Progressive Farm Marketing
Incorporated in Edna, Texas, who expects futures traded on the Chicago Board of Trade to advance as much as 20 per cent to a three-year high of $18 per 100 pounds by November. Delaughter, who correctly predicted an 11 per cent gain in prices last March,
added, "Of all the futures markets in the agricultural sector, rice is the sleeper."
Rice represents almost 50 per cent of the food expenses of the poorest across the
developing world, and 20 per cent of total household spending, according to the International Rice Research Institute, based in Los Banos, the Philippines. In the US, six per cent of incomes are
spent on groceries, data from Euromonitor International show. While the United Nations says global food prices climbed to a record in December, grain stockpiles have been replenished since 2007-2009, when the US
State Department estimates there were more than 60 food riots around the world. Combined inventories of corn, wheat, rice and soybeans will end this year at 457.6 million tonnes, 21 per cent more than in 2007, USDA data show. Rice futures in Chicago closed at $15.01 per 100 pounds on JanUARY 28, up one per cent for the week and 40 per cent below the record $25.07 per 100 pounds reached in April
2008. Traders anticipate prices no higher than $15.87 through January 2012, Chicago Board of Trade data show. The price advanced as much 'as 3.2 per cent to $15.485 per 100 pounds on Tuesday. Hedge funds and money managers more than doubled their net-long positions, or wagers on rising prices, in the
past two weeks, according to Commodity Futures Trading Commission data. Netlong positions were 3,403 contracts, the most in a year.
Egypt's tourism suffers as govts, firms evacuate citizens RANKFURT:
Egypt's
F
tourism sector, one of
the country's top foreign revenue
earner,
is
in
a
shambles as governments. airlines and tour operators
worked together on Tuesday to fly their nationals out of Egypt where protesters pressed their campaign to topple President Hosni Mubarak. According to a Reuters report on Tuesday. Egypt's tourism sector accounts for more than 11 per cent of Gross Domestic Product and offers jobs in a country beset by high unemployment. In 2009. about 12.5 million
tourists
visited
Egypt, bringing revenue of $1O.8bn. The German Foreign Ministry issued a travel warning late on Sunday for Cairo, Alexandria and Suez, but described the situation at Red Sea resorts as calm for the moment. German
tour
operator
Rewe, with 3,100 customers in Egypt at present, advised customers booked on holidays to Egypt over the next week to cancel to relieve pressure on the infrastructure.
..
According to the report, the United States' State Department said that more than 220 US citizens had been evacuated so far from Egypt. and that more than 2,400 Americans had requested
assistance
to
leave. It said it hoped to bring 900 US citizens out of Egypt on Monday with flights departing for Athens, Cyprus and Istanbul. Up to 52.000 Americans
are
registered
with the embassy in Cairo. European
• L-R: German Chancellor, Ms. Angela Merkel; and Israel's President, Mr. Shimon Peres, during their meeting at Peres' residence in Jerusalem, ... on Tuesday. Photo: AFP
airlines,
including Lufthansa, Austrian Airlines and Air Berlin said they were sending larger aircraft than usual to Egypt to meet demand and had agreed additional flights with foreign ministries.
Air Partner, which brokers charter aircraft, said it was working round the clock to help companies ranging from oil firms to supermarkets and telecoms groups to get employees out. "By the close of business today, we will have flown 800 people out of Egypt on 14 flights to a range of safe havens, including Dubai, the US and Europe." it said in a statement. Officials in Turkey and Cyprus said they were making contingency plans to receive tourists evacuated
from Egypt and speed them on to their destinations. reported Witnesses scenes of chaos at Cairo Airport on Sunday, with many people, including Egyptians, scrambling to get on a decreasing number of
scheduled flights. National carrier EgyptAir has cancelled flights for overnight on Tuesday, according to state television.
Gulf stock markets shaken by Egypt unrest
D
UBAl: Stock markets in several Gulf countries, where many leading firms have interests in Egypt, dropped on Monday on mounting
concerns
over
developments in the world's most populous Arab nation. Agence France Presse reported on Tuesday that the Dubai Financial Market shed over six per cent of its value at the opening of trading week, with the DFM index dropping to 1,505.62 points. It closed 4.32 per cent down at 1,543.02 points. The leading traded company, Emaar Properties, saw
its
share
price
plummeting by nearly 10 per cent, the maximum allowed
by the market regulations. It closed 8.26 per cent down. Emaar, which built the world's tallest tower, Burj Khalifa, in Dub"i, has various projects in Egypt. Air Arabia also saw its share plunge by nearly 10' per cent in early trading, and closed 6.09 per cent down. Th~ Middle East's
largest low-cost carrier has a hub in Egypt for its local joint venture Air Arabia Egypt. Arabtec leading construction firm, which also has projects in Egypt, was also among the companies leading the plunge on DFM, with a 9.5 drop in early trading. It closed 6.74 per cent down. A mass revolt broke out across Egypt on Tuesday against the decades-long autocratic rule of President Hosni Mubarak, with more than 100 killed in riots and demonstrations over the past five days and much of the country in turmoiL Cairo's stock market remained closed Sunday
after it had plummeted 10
political arena in the GCC
per cent before trading was
are different from those in
suspended on Thursday. "The drop in the Gulf bourses as a result of the events in Egypt is natural since there are huge Gulf investments in Egypt, especially in the industrial and banking sectors," Kuwaiti economist Mr. Ali AI-Nimesh told AFP Investors in the Gulf Cooperation Council were affected by a negative
Egypt. markets are being led by a negative sentiment," she told AFP In addition to Dubai's, other Gulf stock markets were also down. Neighbouring Abu Dhabi
sentiment, said Ms. Monica
Malik, senior economist at the Cairo and Dubai-based EFG-Hermes investment bank. "Although economic fundamentals and the
Securities
Exchange
was
down 3.74 per cent during trading hours, before closing 3.68 per cent down. Etisalat telecom company, which operates in Egypt through Etisalat Misr. was trading 3.35 per cent down in early trading. Its value recovered a little during trading and closed 2.87 per cent down.
S'Africa's trade account hits RIO.3bn OHANNESBURG: South Africa's trade account recorded a R10.3bn surplus in December compared with an R8.4bn surplus in November, the South African Revenue Service said on Monday. According to a Reuters report on Tuesda y, the
J
country's exports decreased
by 10.4 per cent month-onmonth in December while imports fell by 15.9 per cent. SARS said the December surplus was' "buoyed by higher commodity exports; specifically iron ore, precious metals and base metals." Ten economists surveyed
by Reuters expected the trade
account to register
a R2.75bn surplus in December. SARS said the trade account in 2010 registered a surplus for the first time since 2003 at R5.0bn compared with a R27.3bn shortfall in 2009 .