01/05/2026

BIZ & FINANCE FRIDAY | MAY 1, 2026

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Rice is central to global food security, and even modest supply disruptions can ripple through countries, lifting prices and straining household budgets, particularly among price-sensitive consumers in Asia and Africa. The UN Food and Agriculture Organisation in April forecast rice output would expand by 2% to a record high in 2025/26. The effects of the Iran war are impacting farmers in top exporters Thailand and Vietnam as well as the import-reliant Philippines and Indonesia, growers and traders said. The war has cut fuel and fertiliser flows through the Strait of Hormuz, a key chokepoint that connects the Gulf to global markets. Southeast Asia’s mainly smallholder farmers also face mounting stress as the El Nino weather phenomenon is set to usher in hotter, drier conditions for the region in the second half of the year. “Farmers have already started planting rice in some countries and are using fewer inputs because prices have gone up,“ said Maximo Torero, chief economist at the Food and Agriculture Organisation (FAO) . “We are going to see a tighter global supply situation in the second half of the year and early next year.” In 2008, export curbs by key suppliers more than doubled prices to about US$1,000 a metric tonne, triggering unrest in several countries. More recently, supply tightness in 2022 to 2023, exacerbated by India’s export restrictions, lifted prices and prompted panic buying. Rice shipments are already facing supply-chain bottlenecks. HONG KONG: Oil prices soared more than 7% to a four-year high above US$126 yesterday after Donald Trump warned the US blockade of Iranian ports could last months and a report said he would be briefed on potential fresh military strikes. While Tehran submitted a fresh proposal this week to reopen the crucial Strait of Hormuz, the US president reportedly did not believe it was negotiating in good faith. The Wall Street Journal said he had told national security officials to prepare for a long blockade to compel Iran to give up its nuclear programme. At a meeting of oil executives on Tuesday, he discussed efforts “to alleviate global oil markets and steps we could take to continue the current blockade for months if needed and minimise impact on American consumers”, a White House official said on condition of anonymity. It came as Axios cited two unnamed sources as saying Admiral Brad Cooper, commander of US Central Command, would brief Trump on potential military action. The briefing signals the president is considering resuming major combat operations – which were ended more than three weeks ago for talks – to try to break the logjam in negotiations or deliver a final blow before ending the war, Axios reported. The outlet had earlier reported

Oil surges on potential prolonged Iran blockade

London was flat. The dollar, seen as a safe haven during the crisis, rose against its peers. Equity traders had been relatively upbeat in recent weeks thanks to a revival of the AI trade. Investors were also assessing the outlook for Federal Reserve policy actions after four decision-makers dissented on a vote, the most since 1992. While it held interest rates on inflation fears fanned by surging energy costs, three “did not support inclusion of an easing bias in the statement at this time”, the bank said. A fourth decision maker, Trump-appointee Stephen Miran, had sought a quarter-point cut. The meeting was Jerome Powell’s last as Fed boss, with Kevin Warsh – the president’s pick – to take over next month. – AFP

gas passes – being closed for months more sent crude surging to the highest since 2022, after Russia invaded Ukraine. Brent for June delivery surged 7.1% to US$126.41 per barrel in Asian trade, while West Texas Intermediate climbed 3.4% to US$110.31. Both later pared the gains. Analysts said traders were beginning to shift to the view that the crisis will not be as short as initially hoped. Stocks fell, with Tokyo, Hong Kong, Seoul and Mumbai all down more than one percent, while Sydney, Taipei, Bangkok, Manila and Jakarta were also down. There were gains in Shanghai, Singapore and Wellington. Paris dropped as data showe France’s economy recorded zero growth in the first quarter, while Frankfurt also fell.

o Trump also reportedly considering resuming major combat operations

really tally up with Trump’s actions, which largely continue to point away from any sort of re-escalation at this stage. “That said, while the broader direction of travel is one that continues to point towards a deal of some sort being done, it remains the case that negotiations do appear to be bogged down in a form of stalemate for the time being. “In light of that, it seems that markets are slowly but surely moving from a ‘no news is good news’ mantra, to a ‘no news is bad news’ one.” The prospect of the strait – through which a fifth of world oil and

Trump as saying the blockade was “somewhat more effective than the bombing” and the naval action would not end until he had secured a deal to address Tehran’s nuclear programme, it said. In a post on his Truth Social platform, Trump wrote: “Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon!” He posted an illustration of himself holding an assault rifle alongside the caption “NO MORE MR. NICE GUY!” Still, Michael Brown at Pepperstone said: “It must be said that the heated rhetoric here doesn’t

World rice supply threatened by Iran war and El Nino BANGKOK: Rice supply is expected to fall this year as farmers cut planting acreage across Asia because of fertiliser shortages and soaring fuel costs from the Iran war, with an emerging El Nino also set to squeeze output of the world’s most consumed staple.

A worker cultivates rice plants at a farm in Bangkok. – REUTERSPIC

“Logistics a nightmare, especially in Asia as there is shortage of polypropylene bags, limited truck availability to move rice to ports and shipping itself has been disrupted,“ said a Singapore-based trader at a top global rice merchant, who asked to remain unidentified as they are not authorised to speak to media. While fertiliser shortages and dryness are already curbing yields of smaller crops being harvested in Southeast Asia, the next crop will likely face a bigger reduction. India, Thailand and the Philippines plant their main crops in June and July, while Vietnam and Indonesia are now sowing their second-season crops. Most Asian producers grow two or have become

11.12% to 20.68 million tonnes. Despite the supply worries, the world has ample rice inventories following years of bumper output, with India, the world’s biggest exporter, holding a record 42 million tons or about one-fifth of global stockpiles, according to US Department of Agriculture data, cushioning any drop in global production. Most rice grade prices are currently steady but will likely rise even if the Hormuz situation were resolved immediately, the FAO’s Torero said. Opening the strait soon would avoid a major supply issue but “if we don’t reopen this in the next two to three weeks, the situation is going to get pretty serious“, Torero said. – Reuters

they may not plant or will reduce fertiliser use, which would inevitably cut production,“ said Arze Glipo, executive director of the Integrated Rural Development Foundation. The country’s output could fall by as much as 6 million tons from its typical 19 million to 20 million. “That would leave the Philippines in a precarious position, as imports are also uncertain due to export restrictions, making it extremely difficult to cover any production shortfall,“ Glipo said. In Indonesia, fertiliser supply is not a constraint but the El Nino is expected to curb output. Indonesia’s statistics bureau estimates the rice harvest area in the March to May period will shrink by 10.6% to 3.85 million hectares, while unhusked rice production will drop

three rice crops a year. Sripai Kaew-Eam, a 60-year-old farmer in Thailand’s Chai Nat province 151km north of Bangkok, said high fertiliser and fuel prices have pushed production costs to about 6,000 baht (RM731) per rai (0.16 hectares), from around 4,500 to 5,000 baht for the previous crop, while the price she receives for the unhusked rice she harvests is about 6,200 baht per metric ton. Fertiliser prices have risen to 1,000 to 1,200 baht per bag, from 850 baht, forcing her to cut her use by half. “Fertiliser prices are high, fuel prices are high,“ she said. The Philippines, the world’s biggest rice importer, faces a similar situation. “Some farmers are now saying