Source: tradingmarkets.com

Greater risk of a world food shortage lies ahead and food-exporting countries, including Thailand, should raise their stock-to-use ratio of agricultural commodities, according to Charoen Pokphand (CP) Intertrade Co.

President Sumeth Laomoraphorn said major agricultural producers’ stocks, now in the range of 18-25 percent of consumption, were declining.

Despite the recent plunge in crude oil prices, biofuel production and demand are increasing and eating up supplies of food cereals and grains, he said.

“The world is witnessing the dilemmas of increasing population and need for food, low safety-stock levels and supply uncertainties, while prices are not permitting sustainable food supply,” Mr Sumeth said at a conference on climate change in Bangkok last week.

“These generate the risk of food shortage in the near future and the possibility is very high.”

The forum, co-organised by the United Nations Economic and Social Commission for the Asia Pacific (Escap), raised concerns that climate change may significantly affect food supply and food security, particularly in developing countries.

“Developing nations, with governments and private sectors that depend on imports, lack resources and capacity to develop and sustain production bases. So they face greater risk of food shortage in the future,” he said.

“Those countries whose farming sectors are not strong will face problems in withstanding the impacts of worldwide price fluctuations caused by speculation. The survival of farmers who are producing food for both subsistence and income cannot be ensured.”

To safeguard food supply in the near future, Mr Sumeth suggested that the safety stock network be expanded. Rice, for instance, should be stocked at higher levels, especially in countries like Vietnam and India.

Vietnam has a stock of only two million tonnes out of its yearly output of 35 million tonnes. India has 10 million tonnes — extremely low given its population of one billion.

In Thailand, the rice stock is relatively high at almost 30 percent of the 10 million tonnes consumed each year. But Mr Sumeth said this should also be increased for “the sake of rice importing countries”.

Developing nations are also recommended to strengthen small farms to become self-reliant.

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