Thursday, 19 February 2009

How things change ...

The Wall Street Journal is reporting that Rice Growers Seek to Halt Falling Prices. Just a few months ago the food crisis was about ever increasing food prices and Southeast Asian nations were slapping export controls on rice in order to preserve more of the rapidly appreciating commodity for their own citizenry, but not now. The WSJ says
BANGKOK -- A delegation from Thailand, the world's biggest rice exporter, is asking Vietnam to help it stabilize the tumbling price of rice -- the latest indication of how agricultural markets have changed in the months since riots over food costs gripped parts of the developing world.

Industry experts aren't expecting any major price-fixing accords between the two countries, which together control about 45% of global rice exports.

A Thai participant in this week's meetings in Vietnam, held with representatives of its rice industry, emphasized that the two countries are speaking only in general terms about how to keep prices from falling from current levels.

[...]

"We have to stabilize the world price," said Chookiat Ophaswongse, president of the Thai Rice Exporters Association and a participant in the Vietnam meetings. If the effort isn't successful, he said, "it's going to hurt the overall market."
The report goes on to say
Just a few months ago, residents in poor countries took to the streets to protest the soaring price of rice and other food. Since then, grain prices have fallen about 30% from their peaks in mid-2008, according to the Food and Agriculture Organization of the United Nations.
An interesting note in the article is
Rice prices in Thailand probably would have fallen further, analysts say, without a government program that buys excess supplies from farmers.
Why would any government set out to keep food prices for their people, especially the poor who spend a greater share of their income on basic food, artificially high? Apart from this there is the problem that such a strategy could lead to over production. Will we see rices hills in Asia to go along with the butter mountains and wine lakes in Europe?

2 comments:

matt b said...

Apparently there is no end to the evil that governments cause or the arrogance of planners.

Paul Walker said...

Matt: I have yet to see any end to either.