Rice price increases: another crisis to settle

On the day after of the resumption of political demonstrations in Antananarivo, rice prices knew an increase of around 20%. The white rice kilogram is costing 1200 Ars after a former stabilized price of around 1000 Ars. The Trade minister is denouncing speculation made by rice collectors who are deliberately failing to feed the market to boost prices. 

This stock retention has no more been a secret for around one month. Rice operators had to face up to “unfair competition” from the State. The transitional authorities actually disturbed the market by using the Tiko group’s rice stock as a propaganda tool. A few 30 000 tons have been injected on the market, and sold to a popular price of 500 ariary per kilogram. 

The cheap HAT rice, looted from Tiko’s storage rooms, pulled the prices down on the market. The kilogram plummeted up to less than 1000 Ars. Many collectors preferred to wait for the HAT effect to be over, in order to avoid selling to loss. Stocks bought from producers were more expensive than 500 Ars, needless to tell about the additional fees for dealers.  

The genuine prices are on their way back again. Minister Jean Claude Rakotonirina estimated, however, that the increase was too sharp. He explained that rice shortage in the northern part of the island, particularly in Ambanja, has diverted a part of the Boeny region’s rice production which used to feed up the Antananarivo’s market. 

The destruction of the Magro distributor by the political crisis, then by the authorities, is likely to have serious backlashes on rice supply in Madagascar. The 2008-2009 rice season’s production was good enough, overtaking 4 millions of tons. Of the 250 000 tons of rice bought from abroad in order to satisfy the national demand, a few more than a half had been imported by the Tiko group. 

The risk of shortage of rice is rather reduced. The deterioration of the political situation, however, is dimmed to disturb the market further more because of speculations, either from producers, collectors or from wholesalers. Rice remains a propaganda weapon, be it for or against the on-going regime.