I know a few of people who work in industries that are effected by food inflation and all of them are saying that a food crunch is coming. Rice is one staple I’m worried about – enough in fact that this year I experimented with growing Blue Bonnet Rice from Baker Creek Heirloom Seeds. That experiment hasn’t done as well as I hoped but I believe I’ve learned enough to plant some next season. Which is good because there is a steep decline in rice supplies coming down the pike that the media is doing their best to deny:
From Bloomberg Businessweek:
Aug. 15 (Bloomberg) — The smallest increase in rice stockpiles in five years means global grain inventories will extend a decline that already drove food costs to a record.
Combined global stores of wheat, corn and rice will drop 2.5 percent to a four-year low as farmers fail to keep pace with demand, the U.S. Department of Agriculture estimates. Rice prices will rise more than 20 percent by December as inventories expand 1.1 percent, compared with a 29 percent gain in the past four years, a Bloomberg survey of 13 millers and traders showed.
While wheat and corn prices as much as doubled last year, rice retreated as the United Nations’ global food-inflation index jumped 25 percent. Rice advanced 15 percent since May, potentially worsening the lives of the 1.1 billion the World Bank says live on less than $1 a day. Wheat fell 20 percent since the middle of February on prospects for a bigger crop.
“World rice prices had been far more stable than other cereals,” said Concepcion Calpe, a senior economist at the UN Food and Agriculture Organization in Rome. “Now this is changing and rice is rallying, the international situation is likely to worsen. Wheat may become the stabilizing foodstuff.”
Thailand, the biggest shipper, is bringing back a policy of buying rice from farmers at above-market prices for storage. Exports from Vietnam, the second-largest, may drop 6.9 percent, according to the FAO. Farmers in the U.S., the third-biggest shipper, will harvest 20 percent less after planting more corn and wheat in response to rising prices, the government says.
In Japan, radiation from a crippled nuclear plant may have tainted rice, potentially boosting imports. China may buy 600,000 tons, 55 percent more than a year earlier, after drought and rain damaged crops. Bangladesh may purchase 1.5 million tons, 850,000 more than in 2010, the FAO estimates.
Indonesia will ship in rice for a second consecutive year to bolster stockpiles, Trade Minister Mari Pangestu said July 13. Imports may almost double to 2.2 million tons this year, from 1.15 million last year, the USDA said Aug. 11.
The export price of Thai rice, the benchmark grade in Asia, will reach $700 a metric ton by the end of December from $567 now, according to the median estimate in the Bloomberg survey. That would be the highest since October 2008, a year when increasing food prices spurred riots from Haiti to Egypt.
The USDA cut its estimates on Aug. 11 for the U.S. corn harvest by 4.1 percent and the spring-wheat crop by 5.2 percent. The U.S., the world’s largest agricultural exporter, endured the hottest July since 1955 in parts of the Midwest, the main growing region.
While combined grain inventories are dropping for a second consecutive year, they will still be 27 percent higher than in 2007. Rice prices reached a record $1,038 the following year, 48 percent more than the $700 anticipated in the Bloomberg survey. Wheat would have to climb 84 percent to match its record of $13.495 a bushel in 2008 and corn 12 percent to reach its peak of $7.9925 a bushel, set that year.
Which seems likely given the droughts, disasters and bad crops yields we’ve been seeing. Few of us can grow enough food to truly be self-reliant but it looks like a great time to start up that hobby farm to at least grow one of your staples yourself to minimize your exposure to food inflation. Sara Pitzer’s Homegrown Whole Grains: Grow, Harvest, and Cook Wheat, Barley, Oats, Rice, Corn and More is an excellent place to start.
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