4/25/2008

Rice Shortage vs Gas Shortage

This worldwide rice shortage is something I'm sure that causes panic in Asian countries where rice is the main food staple. I question just how much of a shortage there actually is and how much is speculative in nature to raise the price. The price of rice, along with basically all food, is increasing simply because of increased cost of fuel. Violent protests have broken out in some Asian countries because of the cost and the perception there is a shortage of rice.

In some respects, it reminds me of what happens when we have a hurricane along the gulf coast. Once the hurricane is gone, the first thing people worry about is gas. After Hurricane Katrina, there were few gas stations around that were even open. Those that were open, ran out of gas before noon in most cases. This caused panic. When people panic, they start to to lose their ability to reason. They also become violent. I can't tell you the number of people that got into fights because they thought someone broke in line at a gas station. The cops stayed busy for about two weeks.

Local officials tried, in vain, to reassure people there was plenty of gas. But, the system wasn't designed for virtually everyone to gas up at the same time. As a result, we ran out of gas quickly and the perception endured that we would go weeks, and maybe even months with little or no gas. Once the trucks starting moving again, there was gas enough for everyone. Of course, gas was "only" about $2.79/gallion back then. I don't think we'll see gas that cheap again for a long time, if ever.

I tend to believe the so-called rice shortage is based along the same lines. People are believing that since prices for rice are going up, there must be a shortage. I don't know all the particulars of what the Asian market is like right now for rice. I know China and India have a part in this. But, I honestly believe it is fueled, at least in part, by people who would benefit most from a rise in prices in the rice market. This also goes for people who have ulterior motives to sensationalize the idea of shortages. For example, yesterday the Wall Street Journal had an article advising people to start hoarding food in the USA! I really think that is totally irresponsible journalism by WSJ columnist Brett Arends. He starts out by saying he doesn't want to alarm anyone, but maybe it's time for Americans to start stockpiling food. He tries to give credence to his alarmist article by talking about rising food prices in this country. What he fails to take into account, in his near yellow dog journlistic column, is that food prices are rising due to....ta daaaa, fuel prices! He's trying to give the perception there is going to be a food shortage in the world's breadbasket. This is what I'm talking about with people fueling perceptions that are unfounded. We may be approaching peak oil production (or maybe already surpassed it). But, I tend to believe we are far from (if ever) reaching peak food production. Sure, rice, flour, meal are all going to cost more. But, by no means, should anyone think there is a shortage. And, least of all, a shortage of food in the USA. People just need to calm down. Of course, that's easy to say if you live in this country. In Haiti, I can see why they would panic.

0 comments:

Related Posts Plugin for WordPress, Blogger... Please help the costs of this blog. Please visit our Sponsors on right side of the blog. Thank you!