The importance of rice to Asia is common knowledge. According to UN Food and Agriculture Organization statistics, rice provides one third of all the calories consumed by humans in the region. The crop also has deep cultural and political roots.
Despite its importance, rice may be at the heart of a growing food crisis – prices have risen to a 10-year high while stocks have plummeted to a 30-year low.
"The last time we saw this kind of market, there was a famine in Bangladesh" observed Duncan Macintosh, spokesman for the International Rice Research Institute.
Food is a major factor in measuring cost-of-living expenses – rising food prices were blamed for February’s 2.7% year-on-year jump in Chinese consumer prices, following a 2.2% increase in January. With food security and rural unrest longstanding political issues in China, Beijing has well-used measures to ensure availability and affordability.
"If they allowed all the farms to develop completely freely, along the lines of Japan and Korea, there would be problems," said Khalid Malik, UN resident coordinator and UNDP resident representative in Beijing. "The demand for cereals in China is greater than the total international trade in cereals."
As changing market demand means farmers find much higher returns growing things like vegetables and flowers as opposed to conventional crops, subsidies are awarded to those who carry on producing grain.
But Macintosh claims that the price controls placed on rice to keep it within the budgets of the masses are turning it into a dead-end crop – farmers simply aren’t willing to grow something where the profit margins are artificially low.
After absorbing five years of falling yields, the normally self-sufficient China went onto the global market in 2004 to meet its domestic rice demands.
"Last time they needed to get 1% of their demand from the open market," Macintosh said. "However, 1% of China’s demand works out at 15% of global supply."
Increased Chinese participate in the international rice markets is seen as a threat by the likes of Indonesia and the Philippines that rely on imports to feed their people.
"Everyone’s worried that China will come onto the market with its massive currency reserves and drive up the price" said Macintosh. "The last time other nations went onto the market with China, all anyone heard was a huge sucking sound."