Chapter 2 Blog- “Magnesium Production in China Will Quadruple Within the Next Five Years”

Link: http://www.articlealley.com/article_1810499_15.html

Summary:

This article talks about China is going to increase its supply in magnesium over the next 5 years.  Initially, China's annual capacity of magnesium is usually around 130 million tons per year.  Now the project to produce 300 tons per year was approved by the government and this will continue for the next 5 years.  Ningxia, Shanxi, and Shaanxi are one of the largest magnesium-producing industries in China.  The magnesium production capacity of Ningxia is usually around 18 tons and China plans to double the capacity to around 40 tons.  At the same, since capacity expansion is increasing, it will take more time to produce the magnesium which means it will slow down the export rates from approximately 70% to 59%.  However not everyone agrees with the idea of increasing the capacity of producing magnesium.  A magnesium industry requires appropriate measures to make upgrades to the industry. Since magnesium industries produce magnesium very fast and there are too many private operators, the efficiency of the operation of is not very high.  Every year, China uses 50% of magnesium and aluminium as steel desulfurization during the production process and also since many magnesium industries are growing and developing, our magnesium supply will keep on increasing.  Worldwide, 70% of the magnesium is used as alternative material for aluminium or plastic in automobile manufacturing and 20% of the magnesium is used for making computers and any other electronic devices. 

Connection:

In this article, there was an increase in demand caused by an increase in technological changes resulting in a increased price and an increase in quantity exchange.  By looking at the statistics of the usage of magnesium, we can tell that the demand is really high.  Magnesium also attracts many people because it is a very popular investment and magnesium is a necessity to certain kinds of people.  Also, with the consistency technological changes, manufacturers require magnesium to create electronic devices and automobile industries use magnesium to create cars.  Some people may consider magnesium as an elastic product but at the same time, some people may consider magnesium as an inelastic product.  For example, manufacturers who create computers or any other electronic device will consider magnesium as an inelastic product because magnesium metal is required and a necessity to make computers and any electronic devices.  Our demand for new technology will greatly affect the supply of magnesium because the more technology we demand, the more magnesium we require to make the electronic devices.  Therefore, a slight change in price of magnesium will not affect the demand for magnesium.  However, consumers may consider magnesium as an elastic product because they do not use or rely on magnesium for anything or they don’t consume magnesium as an essential mineral in their diet to build up their body structure to become healthier.  There are many close substitutes for magnesium, so if the price increases for magnesium, consumers can easily go to its alternatives and find something cheaper that can replace magnesium.  Therefore, a slight change in price of magnesium will greatly affect the demand for magnesium by ordinary consumers. 

Reflection:

In my opinion I think increasing the annual capacity of magnesium is an excellent opportunity for us to increase the supply of magnesium since the amount of magnesium consumed is very high each year.  We can expect that the amount of magnesium consumed every year will keep increasing, so that’s why it is a good idea to build up supply and avoid the problem of having magnesium being a scarce mineral in the future.   Also expanding the industries will show signs of prosperity in the economy and it may attract people to make investments in magnesium.  In my opinion I think magnesium is important for everybody because magnesium can also be used as an essential protein that gives people nutrition in their diets.  Therefore, I believe that magnesium is an inelastic product because magnesium is important towards human health and I consider magnesium a necessity to survive.  Also, humans only need small amounts of magnesium in their body structure, so even if there is a slight change in price, it won’t greatly affect the demand for magnesium.  I also believe that technology would keep on advancing and become newer in the future.  This indicates that we need to produce more magnesium, since we need a lot of magnesium to produce new technology and electronic devices.  Therefore, I support the idea of increasing the capacity of magnesium produced each year.

Chapter 1 Blog- "Food Scarcity Fears Support Rice Prices"

Joshua Thang
Economics 12
Link: http://www.mb.com.ph/articles/274468/food-scarcity-fears-support-rice-prices

Summary:

This article is about rising prices of Asian rice on August 27 after a major drought in the Black Sea region and floods in Pakistan that seriously reduced the world’s supply of food.  Russia’s worst drought in a century severely damaged the crops and created many wildfires, ruining its hopes of building its own grains infrastructure.  Pakistan floods wiped out half a million tonnes of wheat supplies.  Asia had an opportunity to shop for rice and they expect to re-sell to other countries at higher prices.  Fresh demand for boiled rice from Africa helped support Thai rice prices, with white rice being sold at $490/tonne.  However, many traders believe that high Thai rice prices would become scarce.  Food scarcity were not as fierce as in 2008, when Thai rice prices hit a record high of $1,080 per tonne.  Major producing countries of rice include Thailand, Vietnam and even India.  Thailand is by far, the world’s largest rice exporter.  Thailand has exported approximately 5 million tonnes of rice so far this year.  Thailand’s goal is to sell around 8.5 million tonnes of rice this year.  India is the world’s second largest rice producer.  Traders expect in the year 2010/2011 that India should harvest around 100 million tonnes of milled rice.  India produced around 89.13 million tonnes of rice in 2009/2010, which is 11.3% less than this year’s supply of rice.  Vietnam is the second largest exporter of rice.  The rice prices of Vietnam rose higher due to a recent hike in export floor prices set by the Vietnam food Association, in industry who oversees rice production and export.  Vietnam rose export prices for 5-percent broken grain from $400 a tonne to $430 a tonne. The floor for 25% broken rice rose from $370 a tonne to $390 a tonne.

Connections:

This article is an excellent example when you want to make a connection of a main idea in chapter one such as scarcity.  Scarcity is a huge factor of the economy.  When the earth has a supply that is not scarce, the economy will prosper, but when there is a supply that is scarce, the economy will run into economic problems.  For example, if food is becoming scarce in the world, food will become more expensive, but if there is a large supply of food left in this world, food will become less expensive.   In this article, it talks about how rice supplies are becoming a scarce supply due to a variety of reasons.  Some reasons included a drought that occurred in Russia and a flood in Pakistan that wiped out most of the rice supply of the whole world.  When the rice supply becomes scarce, the rice prices go up which will cause some problems to the world economy.  This means that when rice is traded among countries, each nation will have to pay more money for one tonne of rice.  A country must buy many tonnes of rice to feed the entire nation.  If each country buys a lot of rice, then each country has to pay extra money in buying large supplies of rice.  When the rice supply becomes larger, the rice prices will go down and the world economy will prosper.  When there is a sufficient amount of rice, the rice prices are lower and each country doesn’t have to pay as much for the rice.  As you can see, the scarcity of a supply can seriously alter the world’s economy and it may take years for the economy to recover.

Reflections:

After reading the article, I now realize why a scarce supply can affect the world economy greatly.  Even though the cause of the scarce supply was from natural disasters and not from human activities, humans should come to a solution and solve how to fix this crisis.  In my opinion I think if humans can use the rice supply wisely and not waste any rice, our world rice supply can slowly increase in its amount.  In a matter of time more and more rice will be produced, and we won’t have to worry about rice being a scarce food supply anymore.  Rice is a major food supply in the world.  Rice is a common food that is eaten all over the world.  In my perspective, if the rice supply was depleted one day due to the wastefulness of rice, many people’s diet will be altered.  People, who regularly eat rice, will have to change their diets to something else.  This is the importance of rice to humans when the rice supply can drastically affect our lives at any point in our lives.  I am concerned of this crisis because I do not want to face the consequences when the rice supply actually gets depleted.  I can do little things that will help us preserve our rice.  One thing I can do is to not waste any rice while eating breakfast, lunch, or dinner.  Little things like these can make a huge difference in saving the world's rice supply.