Rice Talk

I'm not really sure if the widely-discussed looming rice shortage is real or just a figment of some politician's imagination to divert attention away from all these corruption scandals. I did say early on, that rice and vegetable oils (copra, maize, corn and sugar cane) would be the cash crops for this year because of the strong demand coming from the usual commercial, household and now, industrial sources (i.e., bio-fuels). True enough, prices are rising to unprecedented levels, putting pressure on inflation.

Anyway back to rice. I'm not sure if global stocks are starting to be depleted. Major rice exporters such as Vietnam, Thailand and India are scaling back on exports to meet their own burgeoning domestic markets. But the US and say Cambodia still have enough stock and production capacity to compensate for the lower supplies from the said Asian countries. In fact, it is cheaper to buy premium US rice nowadays, compared to locally-grown commercial rice. Yah, it's due to the exchange rate.

So I think all this talk about a looming rice shortage as well rising prices does not hold any water and will likely dissipate as fast as it appeared. The country's production was at record levels last year, and this year, there's no El Nino, in fact the opposite, La Nina could spell more rains that bode well for rice farmers.

OK, it will be years before the country can achieve self-sufficiency in rice production. A quick drive through Bulacan and Pampanga reveals the true state of affairs: rice fields are being converted into residential areas and golf courses. This is also the case, I believe in Vietnam. As the country tries to industrialize, there is a noticeiable shift away from traditional agricultural pursuits such as rice production.

And so we import from the US and other countries. Again, I don't think there's a supply shortage.