Word: rice
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Dates: during 2000-2009
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...What has changed is that, because of economic reform, the government has gradually eased its control over the rice trade during the past 15 years. India is now more open to the world - and more exposed to global price fluctuations. Farmers and traders across India are now selling to the highest bidder. That means a lot of Indian rice that was once sold domestically is instead sold abroad for higher prices - which in turn drives up domestic prices. The government, in an effort to keep as much rice as possible at home to quell inflation, has banned exports of nonbasmati...
...economic dynamics, as they play out in national markets, can be even more complicated. Take India, for example, where rice prices are rising fast, contributing to 7% inflation last month, the highest in more than three years. The country is not suffering from a classic case of tight supplies. National rice production this year should hit 94 million metric tons, up more than 2 million metric tons from last year and more than 20 million metric tons from 2003's crop, which was devastated by a bad monsoon. Nor have shortages hit a government-run rice-distribution program that helps...
...problem is that intervention usually has unintended consequences. In theory, the export ban should ease prices in India because more rice should be available. But because the global price remains a benchmark, Indian rice traders are resistant to selling their stocks for much less than they would get on the international market. That means less rice on the domestic market and higher prices for Indians. As economist Swaminathan S. Anklesaria Aiyar wrote recently in the Times of India, cutting exports is a form of national hoarding: "Governments would like to believe that hoarding by traders is terrible, whereas hoarding...
...Bottom of the Food Chain Of course, higher global prices hurt the poor most, and the impact is particularly heavy in countries such as Bangladesh and the Philippines, which are dependent on imported rice to feed their large populations. A November cyclone in Bangladesh ravaged the fall crop, destroying some 800,000 metric tons of rice and forcing the country to import an extra 2.4 million metric tons from India simply to stave off famine. In Vietnam, bad weather and pest outbreaks hurt harvests. In the Philippines, where some 68 million people live on less than...
...Asia's rice crisis isn't likely to ease soon, and may get worse due to ominous long-term trends. The Rice Institute's Zeigler says rice production is not keeping pace with demand from surging Asian populations. The U.S. Department of Agriculture estimates that worldwide rice consumption increased 0.9% last year, to nearly 424 million metric tons. Production increased less than 0.7%. "This has been coming on for several years now," Zeigler says, noting that global stocks are at their lowest point in decades. "We're consuming more than we've been producing. And as demand for rice continues...