Era of cheap rice at an end in Taiwan: COA

Officials with the Food and Agriculture Department under the COA said that retail rice ranged from NT$40 to NT$41 per kg in January and February, much higher than the average price of NT$37.54 per kg for the entire year of 2008, and even higher than the range of NT$38 to NT$39 per kg in March and April 2008, when a supply shortfall of 100,000 metric tons were recorded due to damages in rice production.

If compared with even earlier years, the rice retail price in January and February soared sharply, rising from NT$34.3 in 2005, NT$34.31 in 2006, and NT$33.66 in 2007, COA officials said.

They attributed the sharp price rise in the past two months to three major reasons: one, reduced production in the second half of last year, when domestic rice supply suffered a shortfall of 14 percent or 60,000 metric tons. Second was that the COA hiked its price for mass rice purchases by NT$2 per kg, which in turn forced rice dealers to boost their buying price offered to rice farmers.

Third rested with the increased production cost experienced by rice farmers last year, due to rising oil, fertilizer and electricity prices.

COA officials said although consumers would suffer from rising prices, the COA should safeguard reasonable profit for rice farmers and not force rice prices to drop sharply.

Accordingly, the officials said that the rice price will no longer return to the previous low level of under NT$35 per kg.

Around the Chinese New Year holidays, the retail price for small bags of rice, weighing two to four kgs, rose by NT$10-20. But retailers daren't raise their retail prices again amid sluggish buying sentiment, COA officials noted. 

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