The Price of Rice, Not Nice

Rice on the global markets has increased in price by 50% in the past two weeks. This is on top of the increases for other grains such as corn and wheat. Most people don't realize that a huge part of the world's population depends on rice as its primary food. Already millions of people are not able to feed themselves and this is going to hurt them even more. According to the article the price is easily going to increase again this much before the year is out. We are facing starvation for millions of people around the globe.

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.

Update: Krugman talks about this today as well. Great minds and all that.