Rice May Triple in 18 Months as Supplies Tighten, Duxton’s Peter Forecasts

Wednesday, December 1, 2010
By Paul Martin

By Chanyaporn Chanjaroen
Dec 1, 2010

Rice, the staple food of more than three billion people, may as much as triple in 18 months as flooding in exporters including Thailand tightens supplies and demand climbs, according to Duxton Asset Management Pte.

“Rice will blow out the stocks,” said Ed Peter, chief executive officer, who co-founded the company last year with Managing Director Desmond Sheehy. Both worked at Deutsche Asset Management and the Deutsche Bank AG unit owns 19.9 percent of Duxton, while Peter, Sheehy and staff own the rest. Duxton, based in Singapore, invests in farmland, Asian stocks and wine.

Peter’s forecast, in an interview on Nov. 29, would put rice at more than the peak during the 2008 food crisis, which triggered social unrest in poorer states. Wheat and corn also surged that year, while record oil prices boosted fertilizer costs. Kiattisak Kanlayasirivat at Novel Commodities SA, which trades rice, said farmers can replant quickly as floods recede.

“A price increase of 10 percent to 20 percent would be considered quite a lot, not to mention double or triple,” said Kiattisak, a director at Novel Commodities’s Thai office, which handles about 1.5 million metric tons of rice a year.

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