Drastic rise in price of rice

The price of rice has produced a rise of 70 per cent in the last three months. Mihály Bencs, the managing director of Riceland Magyarország Kft, has explained the latest developments to us. – A price rise of 100-200 per cent within a few years. Incredible… – Global demand for rice has increased drastically, alongside with its price. – What is the reason of this drastic price rise? –There are several reasons. An increasing number of farmers are turning to “energy plants” as rice production is very costly, mainly owing to the huge quantity of water required. A number of Asian countries have also introduced restrictions on water consumption. The same is true for the EU. Transportation costs have also increased incredibly, while the USD is weak. – Are these factors sufficient to account for such a substantial price increase? – No, but demand is also expanding as a result of economic growth in China and India. – What if they consume enough… – Big rice producing countries try to supply their domestic markets primarily, which means export restrictions have been imposed by these. – What are the effects on Hungarian consumers? – The Indica type rice is consumed in Hungary. Its price has gone up by 80 per cent since the autumn of 2006. We are trying to dampen the effects of this price rise, but as rice itself accounts for 90 per cent of the consumer price, there is only very limited room for cost reduction. – Is there any hope that this process will be reversed? – Hardly. It is an unfortunate trend, that basic foods might soon become luxury products.