Let the rice riots begin!
Global demand for rice is surpassing production, and US farmers aren't helping.
Rice is a staple food for half of the world, and production of it is declining. US farmers can make more money growing other food, so they are planting few acres of rice.
Photo illustration/Creativ Studio Heinemann/Westend61/Newscom
I've been warning on this site that 2008's short-lived Food Riots would be just a prelude to what was to come if agricultural commodities were to run unchecked:
"The flash food riots that rippled around the globe briefly in early 2008 were likely a mere preamble to something much bigger, but how do we set ourselves up for it?"
from Ag Plays: The Beans or the Business, September 12th 2010 (TRB)
I was more prescient than I really wanted to be. The long-simmering Egyptian revolt had plenty of underlying causes - but the proximate one was food shortages, just like in Tunisia.
And now, for your viewing displeasure, I give you the nascent Rice Rally. Here we go...
From Bloomberg:
U.S. farmers are planting the fewest acres with rice since 1989 just as global demand surpasses production for the first time in four years, driving prices as much as 12 percent higher by December.
Plantings in the U.S., the third-biggest shipper, may drop 25 percent this year because growers can earn more from corn and soybeans, according to the median in a Bloomberg survey of nine analysts and farmers. Rice, the staple food for half the world, declined 4 percent last year, extending a 2.9 percent drop in 2009. The other crops jumped 34 percent or more.
A Texas farm marketing guy tells us that "the Acreage War has begun". He's expecting a rally for rice futures on the CBOT to three-year-highs of $18/100 pounds. Acreage War indeed as the prices for other soft commodities are also racing higher.
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