Comments on: The Price of Rice

By: Bithead

Bithead — Tue, 08 Apr 2008 17:28:16 +0000

I wonder what the Donner party would have done with genetically modified food?

Depends. Are we talking Fava beans, here?

By: Dave Schuler

Dave Schuler — Mon, 07 Apr 2008 18:28:05 +0000

Yes, that's pretty much the definition of “hoarding”. I'm not faulting them for it and I agree with you about the problems caused by laws, regulations, tariffs, quotas, and bans.

And when governments store grain, that's hoarding, too.

Again, that's just definitional. The connotations you're applying are yours.

By: MP Wall

MP Wall — Mon, 07 Apr 2008 17:39:55 +0000

Is it hoarding if they hold back their crops to increase their profit? Farmers in most of the world stuggle under distribution systems that cause them great harm in pricing of crops, now for the first time in a long time the prices being paid for ON farm grains are rising, so the farmers that don't have to sell immediately and can wait to sell in a rising market are. Hoarding is, in my opinion, too harsh a word for the farmers in this instance. Government owned stocks in Thailand and elsewhere are "held" for times such as these, are these governments "hoarding" if they don't release all their stocks now, but straggle them out or wait until the stiuation becomes more severe to release them? MPW

By: The price of food, and what drives it | BitsBlog

The price of food, and what drives it | BitsBlog — Mon, 07 Apr 2008 14:37:30 +0000

[...] note Dave Schuler over at OTB this monring, talking about the price of rice going up. When I read this post by one of the [...]

By: Dave Schuler

Dave Schuler — Mon, 07 Apr 2008 14:28:56 +0000

While global inventories have been shrinking the hoarding I'm thinking about is by the growers themselves.

It seems to me that growers who are aware of the disparity between world market prices and the fiat prices under which they're operating are likely to take some kind of action in the hopes of driving the price they're getting closer to world prices. Those measures, in turn, could drive prices up farther and faster than they might otherwise rise.

By: fester

fester — Mon, 07 Apr 2008 13:50:29 +0000

Just throwing out some basic speculation here. As Bithead notes, all grain prices are increasing at very large rates (50%+ per year) Hoarding right now does not look likely as the global supplies of other grains and near substitutes are at or approaching historical lows, so potentially the threat of a supply run is increasing prices. Throw in a weaker US dollar so dollar denominated future contracts will increase in nominal price (I wonder what these charts look like in Euro or Yen?) and increase in fertilizer prices, transportation costs, and demand....

By: Bithead

Bithead — Mon, 07 Apr 2008 13:08:02 +0000

reports like this one from India and this one from Pakistan suggest that the cost of oil amounts to 25% or less of the cost of rice cultivation

... but say NOTHING about the cost of transporting it. Nor do they account for the costs of support items such as cost of ferilizer, and shipping THAT, which also, of course, requires oil.

But before we get too isolated on the price of rice, perhaps we ought to look at the costs of food as a whole, which is also going up by similar amounts.

And that, too, is tied to the price of oil. How much of the move toward more profitable crops, as you say, is to grow corn for ethenol, which in turn is being driven by huge governmental subsidies?

And to think this whole chain of events is being driven by a myth of global warming.

By: DL

DL — Mon, 07 Apr 2008 11:07:36 +0000

Hell if they don't want our GM rice, we'll just have to eat it ourselves, but no financial aid to the starving so they can purchase other people's rice adding to the shortage.

I wonder what the Donner party would have done with genetically modified food?

By: MP Wall

MP Wall — Mon, 07 Apr 2008 03:13:09 +0000

In the states we have several reasons for price increases. Rice is a very oil dependent crop, multiple cultivations, multiple applications of herbicides and fertilizers (oil based as well as dependent on tractors or aircraft for distribution), reductions in available water supplies (lower water tables and pumping with diesel or natural gas powered pumps), crop land being turned into subdivisions (mainly Texas), and competition from other pricier and easier to grow crops (wheat and soybeans). Internationally, we have Australia out of the market due to drought, reduced crops in other areas like Argentina and increasing demand from nations that have had reductions in harvests and increases in demand due various reasons. As to our exports, we are something like #3 in the world behind Thailand and Vietnam. Most of our exports are sent to central and south American countries and the Caribbean basin nations. We also export a lot of rice to Iraq, Saudi Arabia, Turkey and we donate to African nations and other nations (look at the USDA export reports and the number of nations buying US rice is larger than you think). I hope this helps answer some of your questions. If not email me some more specific questions and I will see if I can give you the answers. MPW