By Jane Han
Staff Reporter

Panic is gripping rice-eating countries worldwide as their staple food that hit a new record price Thursday is getting harder to buy with some of the biggest rice exporting nations now shutting down outbound shipments to secure their own stockpiles.

Poor harvests, rising demand and low stockpiles have been the main factors fueling the severe imbalance between the global supply and demand for rice, according to experts.

After several months of gains that were often steep, the May rice contract on the Chicago Board of Trade climbed to new highs Thursday, trading at $20.35 per 100 pounds at its highest point in the day.

``This is probably the beginning of more extreme price hikes this year,'' said Sung Myung-hwan, a senior economist at the Korea Rural Economic Institute.

The price of rice, a major staple for about 3 billion people, has shot up 42 percent this year alone, which is already more than last year's 33 percent gain.

He said the export bans slapped on by Vietnam, India and China, which are some of the biggest rice producers, have only worsened the situation.

The United Nations' Food and Agriculture Organization forecast that global exports will drop 3.5 percent this year to 29.9 million tons as rice-growing nations continue to halt shipments to secure their own supply.

So how is the global shortage pinching the domestic market?

Local experts say South Korea is relatively immune from any direct impact since it secures its own solid supply.

``The rice shortage and the domestic market are pretty much separated,'' said Sung, explaining that 95 percent of homegrown rice is consumed here, while only 5 percent must be imported by law.

Similar to Japan, the South Korean government heavily subsidizes its rice farmers, paying them more money than the market price and limiting imports.

Hur Chan-kook, a senior research fellow at the Korea Economic Research Institute, said for these reasons, the global rice shortage shouldn't be a big concern for local shoppers.

However, he said the staple's price hike will trigger a similar upward pattern for other crops.

``Corn, soybeans and wheat ― all of these have been trading at record prices lately, and the skyrocketing rice costs will only produce more speculation,'' he said.

The United Nations warned in February that 36 countries will face severe food shortages this year, as grain reserves have bottomed out to a 26-year low.

jhan@koreatimes.co.kr