This is the second time in less than two weeks the government took such measure. On Dec. 25, 2008, the COA released about 2,800 metric tons of rice to the local market. "The COA will continue making every effort to help maintain the retail price of rice at around NT$40 (US$1.20) per kilogram," the council's Deputy Minister Wang Cheng-taung said. Rice is a staple food in Taiwan and the measure is part of a government price-adjusting mechanism implemented since 1974.
The price of rice has risen markedly in Taiwan over the past year. On Jan. 6, the retail price of white rice hit NT$40.04 per kilogram--the highest in the island's history, compared with NT$36.11 a year ago, an 11-percent increase. The wholesale price of paddy also reached NT$24.15 per kilogram, a 13-percent jump over the same period last year.
Typhoons last summer were viewed to have contributed in part to the price hike as they reduced brown rice production by over 40,000 metric tons, while increased production costs were also held responsible for jacking up the rice prices.
Outside Taiwan, the rice price hikes were even steeper. COA officials quoted a U.S. Department of Agriculture report, saying that the U.S. exporting price of California medium-grain white rice increased 87 percent last year to reach US$1,102 per metric ton in January, while Thai long-grain white rice rose 50 percent to US$576 per metric ton. The hike is again due to soaring oil prices, which have driven up the costs of fueling farm machinery and purchasing fertilizers.
To make up for the farmers' increasing production costs, the government raised the purchasing price from NT$21 to NT$23 per kilogram in May last year. Rice is harvested twice a year on the island and farmers can choose to sell their crop either to the Agriculture and Food Agency under the COA at a guaranteed purchasing price, or on the market, whichever offers the better price. The farmers' income is then assured. The government stocks the grain until the retail price reaches a certain amount and then releases it through public bidding to stabilize prices.
The ROC Food Administration Act stipulates that the country should store enough rice to feed people for three months, which represents about 25 percent of the nation's yearly consumption. Currently, there are about 300,000 metric tons of paddy rice in stock.
In comparison, the Food and Agriculture Organization of the United Nations recommends stocking 17-18 percent. "Therefore, our rice price remains relatively more stable than that in other countries," added an official from the AFA.
Write to Jean Yueh at yueh@mail.gio.gov.tw