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Economy

Ebola threatens rice shipments to Africa

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Workers unload sacks of rice from a barge to a cargo ship in Bangkok.   © Reuters

BANGKOK -- What is the impact on the rice fields of Asia of the Ebola epidemic in the jungles of West Africa? Not much, yet, but the Ebola scare has highlighted Africa's growing dependence on rice, which has traditionally been Asia's main food staple. It is still too early to say what the eventual outcome of the Ebola outbreak will be. At worst, it could develop into a global pandemic; at best, there will be a lot more misery in the three countries primarily affected -- Guinea, Sierra Leone and Liberia. The rice industry provides some insight of what may be in store for this unfortunate corner of the world.

     The three Ebola-affected countries are highly dependent on rice imports from Asia, which amounted to about 900,000 metric tons last year. Ships carrying rice are becoming increasingly reluctant to service ports in the affected countries, fearing crews may become infected, or that vessels will be quarantined or face other restrictions. So far the epidemic has not resulted in outright shipping bans, although many ship owners are showing a growing reluctance to service the Ebola-impacted countries.

    "Ebola is a threat to our trade, but it's not too severe yet," said Vichai Sriprasert, honorary president of the Thai Rice Exporters Association and president of Riceland International, a leading exporter of parboiled rice to Africa. "There is a fight going on between the ship owners and the ships' captains, crews and insurers, who don't want to go to these African ports, but it is difficult for the ship owners to get out of the charter contracts they have already signed. Once these contracts expire it could be a real problem," Vichai said. Ships could dock in the nearby Ivory Coast or shift the cargo into containers, which require less handling. But both options would lead to higher rice prices for consumers, he said.

Potential for problems

"Up to now we don't see a big problem," said Rajeev Raina, a senior vice president of Olam International, an integrated food supply company. "But if [the epidemic] goes where the [World Health Organization] says it will go -- with 1.4 million infections by the end of this year -- then this is a problem." Asian rice exporters would be particularly affected if the epidemic were to spread to Nigeria, which accounts for more than 3 million of the 12.3 million metric tons expected to be imported to the continent this year. Exports of par-boiled white rice to Nigeria, chiefly from India and Thailand, have risen this year after the country reduced its tariffs on imported rice from 110% to 30%. However, Nigeria was declared free of Ebola transmission by the WHO on Oct. 20.

     Between 2007 and 2013, demand for rice in Africa rose by about 6.6%, with imports peaking at 12.3 million metric tons last year -- almost one-third of the total export market -- according to industry experts at the first global rice summit in Bangkok this month. African countries started to promote local production of rice aggressively following the so-called food crisis from 2007 to 2008, when rice prices jumped to more than $1,000 per metric ton because of supply fears triggered by export bans in India and Vietnam, two of the world's top exporters.

     Despite efforts to reach self-sufficiency, production has failed to keep up with demand in the continent, where imports have grown in tandem with consumption. In some African countries, rice consumption has reached 40kg per head per year, on a par with most Asian countries, according to Frederic Lancom, Africa director for CIRAD, a French agricultural research organization.

     Locally produced rice in the Ebola-hit countries has not shielded them from the food repercussions of the epidemic. "It's not so much a question of production but of the transport of the rice to the local markets," Lancom said. "Especially in Guinea, because the major rice production areas in Guinea are in the forest regions, where the Ebola epidemic started."

     Experts fear domestic logistical snags and the possibility of reduced rice imports in coming months could lead to further problems with the next African crop. "We think we should start now on the post-Ebola food insecurity problems because of the trade constraints," said Adama Traore director general of the African Rice Center, a sub-Saharan rice research organization. "If they can't harvest enough this season [in Africa] there will not be enough seeds for the next crop even if the countries are Ebola-free. It could provoke a malnutrition and famine problem which will induce the populations to escape [their countries]."

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