Tight demand and supply

World grain reserves last year were good for only 57 days, down from 180 days a decade ago.

Worldwide wheat stockpiles are expected to fall to 112.5 million metric tons in the year ending May 31, the lowest since 1978, the U.S. Department of Agriculture said last month.

"The chronically tight food supply the world is now facing is driven by the cumulative effects of several well-established trends that are affecting both global demand and supply," said renowned environment analyst Lester R. Brown.

"On the demand side, some 4 billion people are already struggling to get enough to eat," Brown said. "Meanwhile, on the supply side, there is little new land to be brought under the plow unless it comes from clearing tropical rain forests in the Amazon and Congo basins, or in Indonesia or the Brazilian Cerrado."

The Earth Policy Institute founded by Brown has discovered that new sources of irrigation water are even scarcer than new land to plow. During the past 50 years, global irrigated land has nearly tripled, expanding from 94 million hectares in 1950 to 276 million hectares in 2000. In other words, the amount of cultivable land is shrinking by 1 percent every year.

This view was echoed by experts working with other international institutions.

"World agriculture has entered a new, unsustainable and politically risky period," says Joachim von Braun, head of the International Food Policy Research Institute in Washington, D.C.

Main rice exporters like Thailand, Myanmar, Laos, Vietnam and Cambodia are mulling the establishment of a global rice cartel called OREC (Organization of Rice Exporting Countries), an OPEC-style supply and price management body, to coordinate the efforts to maintain a supply-and-demand balance.