Sunday, April 13, 2008

Global Rice Shortage

Droughts in China and Australia as well as declined production in Japan and the US are causing a global crisis, for poor countries in particular. Rice prices are soaring as a global rice shortage ensues while little is being done to stop it. Rice growing countries are hoarding their crops while other countries are enforcing export taxes, quotas, and even bans in some countries. According to this article in the Financial Post, rice prices have increased 77% since last October to $20.20 per 100 pounds. Rice production is predicted to increase in most Asian countries while production will decrease by 90% in Australia due to the serious drought that has been going on there. US stock piles of course grain, mainly rice and corn, are at a 25 year low. The decline production and soaring prices of rice can be attributed to the rising price of corn due to the use of ethanol. Should our need for oil and energy compete with our need for food? We all know this is a bad idea after Webber's lecture on corn-based ethanol and now we can actually see the effects of this poor decision to use food for energy. At the end of the Financial Post article, the president of The World Bank Group predicts that 33 countries are at risk of facing social unrest due to the soaring food prices. We're on the brink of an extremely serious problem.

I have a friend who works for a pan-Asian bistro here in Austin where rice is served with every dish. He spoke to the owner who is also the chef at the restaurant about the growing rice shortage, telling him that stories are starting to run on CNN and BBC about it. In mid-sentence as my friend was saying this, the owner picked up the phone and called Costco to see how many bags of Jasmine rice they had left at the time which was 200 bags. As soon as he hung up the phone, he ran to his van to drive to the San Antonio Costco where he buys all of his rice. By the time he got there within the next hour or two, there were only 100 bags of rice. He bought all of them which would be a year's worth of supply for his restaurant. If this shortage can cause panic for a restaurant owner in Austin, TX, think of the social unrest that will prevail in poor countries as the price of their most precious commodity continues to increase.

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