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.