Rice Shortage and Inflation

Milli decades ago, when man was hungry, man hunted for food or plucked from his harvest.  The minions of evil scoured the earth and stole his crops, and soon he had to put fences.  Soon he had to hire guards to watch over his food.  Soon he had to plant and hunt more to be able to give more to the extra guards' mouths to feed.  Soon there was so much "bills to pay" that man got out of the barter system and invented currency.  It is now that the societal structure of capitalism is unraveling at the seams.

In the past three years, oil has multiplied more than five times, sending an inflationary spiral for everyone who is not in a cave.  Margins are decreased by this, hence price is increased to compensate.  Just recently, a friend with a piggery business reports of closures left and right.  Even Pig Feeds have gotten more expensive, so they are now using Chicken Feed for the pigs.  This will in turn raise the cost of Chicken Feed, and consequently raise the price of chicken.  

And of course our rice shortage. Ironic that a country so rich in agricultural farmland needs to  augment the current supply of rice by importing around 2.2 million metric-tons (MT) of rice from Vietnam.

There is also the supposed blamed cause of Booming Chinese economy, where the demand for infrastructure, food, metal, cement, is said to be sucking out the world's supply.  Yeah right.  These extra citizens did not just pop out of thin air suddenly.  They were born as babies like us, popped up one by one in this world and demand grew in proportion, so there must be some global greed hoarding and taking advantage of the spiral. 

Worldwide rising demand has seen rice stocks plummet to their lowest in about three decades, with average prices doubling over the last five years.

 

Earlier this month the UN secretary general warned that global food stocks had fallen to their lowest level in decades, driving prices up and threatening millions with starvation.

 

That is worrying governments – especially in the poorer Asian nations where a rise of even a few cents can for millions mean a difference between surviving or going hungry.

 

Earlier this month, the rising cost of rice brought protesters onto the streets of the Indonesian capital, Jakarta.
 

Robert Kiyosaki of Rich Dad Poor Dad Book fame talks about how capitalism is stumbling.   Our problem is a toxic U.S. dollar. Printing funny money steals from the poor and middle class, savers, and the elderly. It may be legal, but it isn't moral or ethical. As long as the Fed is allowed to wield its power at will, the prices for food and fuel will only go up.  The rise in the price of gold is a sign that capitalism has stumbled. And when capitalism stumbles, workers' wages buy less and savings are wiped out. Even gains from the stock market are diminished because our dollar gains are worth less.

Aside from the obviously lessened purchasing power due to rising inflation, social unrest and crime is expected to rise. Food quality will no doubt suffer, as rice portions are reduced, or rice quality that is served would be downgraded.  Patties will shrink, because, beef, chicken, pork and wheat are more expensive and fast food can't afford to raise prices.  Already, the wage board is finalizing a wage hike for the minimum wage of the daily employee.

Something somewhere will give soon. And it won't be pretty. 

 

 

Comments

  1. April 17 (Bloomberg) — China, the world’s largest grain producer, raised taxes on fertilizer exports and the Philippines, the biggest rice importer, failed to fill a tender as record prices heightened concern the world is running short of food.

    China will increase export duties on all fertilizers and some related raw materials to safeguard local supplies during the main growing season, the Ministry of Finance said today. The Philippines received offers for just two-thirds of the 500,000 metric tons of rice that it sought to buy at a tender.

    Rice futures in Chicago surged to a record today, following gains in wheat, corn, palm oil and soybeans, which have all risen to their highest ever this year. The rally, including record crude prices, has stoked concerns inflation will rise and civil unrest may spread. The food crisis was of “emergency proportions,” United Nations Secretary-General Ban Ki-Moon said on April 14.

    “The prices are just too high,” Vic Jarina, the deputy director of the Philippines National Food Authority, said today after the rice-supply offers were announced. “We will review the bids and decide whether we’ll have more tenders.”

    Rice, the staple food for half the world, rose as much as 57 cents, or 2.5 percent, to a high of $23.12 per 100 pounds (45 kilograms) on the Chicago Board of Trade. The contract, which has more than doubled in the past year, was at $22.985 at 4:47 p.m. Singapore time.

    Civil Unrest

    The World Bank has forecast that 33 nations from Mexico to Yemen may face social unrest after food and energy costs increased for six straight years. Haitian Prime Minister Jacques Edouard Alexis was voted out of office this month by the country’s senate after violent protests over food costs.

    Rice suppliers offered the Philippines 325,750 tons compared with the 500,000 tons tendered for, according to the tally from the National Food Authority. Prices were more than 40 percent higher than the last tender in March, which also fell short of requirements.

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