Remember the key situations here are "food protectionism"; countries will be hording their own food, exaggerating the problem even further and "social unrest"; people will be desperate to feed their families. And this is a very real risk to the "middle class" growth in these emerging markets we've been relying on. [Feb 26: NYTimes - Rising Inflation Creates Unease in the Middle East]. Remember, this is my whole thesis on crops... as we move from 1 season to another to overplant 1 thing, it creates a shortage in another... and this is a rotational crisis, in an ever expanding spiral upward in prices. [Apr 3: Corn Jump to $6 - Start Stocking up on Soda Pop] But on to the scary stats on rice...
- A global rice shortage that has seen prices of one of the world's most important staple foods increase by 50 per cent in the past two weeks alone is triggering an international crisis, with countries banning export and threatening serious punishment for hoarders.
- With rice stocks at their lowest for 30 years, prices of the grain rose more than 10 per cent on Friday to record highs and are expected to soar further in the coming months. Already China, India, Egypt, Vietnam and Cambodia have imposed tariffs or export bans, as it has become clear that world production of rice this year will decline in real terms by 3.5 per cent. The impact will be felt most keenly by the world's poorest populations, who have become increasingly dependent on the crop as the prices of other grains have become too costly.
- Rice is the staple food for more than half the world's population. This is the second year running in which production - which increased in real terms last year - has failed to keep pace with population growth. The harvest has also been hit by drought, particularly in China and Australia, forcing producers to hoard their crops to satisfy local markets.
- The increase in rice prices - which some believe could increase by a further 40 per cent in coming months - has matched sharp inflation in other key food products.
- The consequences are visible across the globe. In Bangladesh, government-run outlets that sell subsidised rice have been besieged by queues comprised largely of the country's middle classes, who will queue for hours to purchase five kilograms of rice sold at 30 per cent cheaper than on the open market.
- ... moves by some larger supermarkets in Thailand to limit purchases of rice by customers.
- The shortage has afflicted India, too: on Monday, the government banned the export of non-basmati rice and also raised the price of basmati rice that can be exported.
- And although China has said it is secure in its supplies of rice, the fact that the government has offered to pay farmers more to produce more rice and wheat suggests otherwise.
- '33 countries around the world face potential social unrest because of the acute hike in food and energy prices'.
- 'In virtually every East Asian country, high food prices are raising headline inflation and contributing to a significant decline in the real income of the poor, most of whom spend a big chunk of their income on food,' he said last week.
- Government officials are projecting the number of Americans receiving food stamps will reach a record twenty-eight million later this year. Over the past year, more than forty states saw the number of food stamp recipients rise. A ten percent jump in food stamp recipients was recorded in six states: Arizona, Florida, Maryland, Nevada, North Dakota and Rhode Island. In West Virginia, one-in-six residents now receive food stamps.
- Well, two things are happening. One, people are losing jobs, their losing hours of work, their wages are going down, so they need more assistance from the government in the form of food stamps and other help. And two, food prices are rising faster than they have in many years, and they’re particularly rising for staples that low-income people buy.
And you wonder why 80%+ of Americans believe the country is heading in the wrong direction...
