Rice Market Shortage Analysis
How Fear Turned a Surplus into Scarcity. this is a story of food shortage and scarcity which sent shockwaves around the world. From good intentions went bad, to shadowy trade deals, corrupt government officials, and warehouses full of rice in a country that didn’t want it.
Rice market is heavily run by governtments… and don’t you know that there is a shortage of rice in Asian Market at one point. India early this year started to ban selling its rice abroad, for India’s good intention of food security and guarantee food to it’s country, with this it set a chain of reaction abroad and in Asia, which increased the rice price at almost up to 20% in the international market overnight. As a result Egypt, Thailand, and Vietnam also started to ban export of rice and soon the ripple arrive to Philippines which is the number one importer of rice in the world and as a result the Department of Agriculture secretary announced on national TV to decrease rice consumption, that lead to fear of shortage which resulted to hoarding and the end was greed, which increased the prices for Rice. Well Countries like China, India, and Japan’s rice prices was not really affected with this panic because there was really no shortage of rice and they have enough rice.
Now with this shortage, experts and economists started to looking for rice to stop this escalation of rice crisis in the Philippines, even on Hongkong and Taiwan; And during this crisis in the United States rice is disappearing too even at Costco that Costco started rationing rice to 80lbs per visit; and Filipinos in the US started sending rice to the Philippines.
To stop the panic these experts and economists found the solution from Japan, Well Japan also is a rice producing country but does’nt like to export or import rice. For years and years United States want to sell rice to Japan but Japan doesn’t want to import from any other country including USA to protect their farmers, so United States went to international court and US won the case so that US can sell rice to Japan with an agreement not to resell that USA imported rice but just for consumption. From that time on Japan started to import rice from the USA and all those time Japan just kept importing rice from United States and just kept all those million metric tons of rice in their warehouses, they did not sell it in Japan market because they were saying that Japan consumers doesn’t like USA rice and US is saying that if those rice are sold to public Japan people will like it.
Now with this crisis, US stepped in and asked Japan to sell all those metric tons of rice to this exception which is the Rice crisis that’s happening in the Philippines and around Asia, at first Japan doesnt want to, but in May 2008, Japan said OK we will sell the rice to Philippines and all of a sudden that stopped the Crisis after all, it blew the crisis bubble which weren’t in the first place, because there were a lot of rice in Japan, it tricked the world and stopped the crisis.