If you are planning to add serious ammounts of rice to your food storage take note of this. http://www.ft.com/cms/s/0/2248164c-e41e ... ck_check=1, if they're right there will be hugh price increases in the near future.
Fear of ‘super-spike’ in rice market
By Javier Blas in London

Published: December 8 2009 17:53 | Last updated: December 8 2009 17:53

Rice prices have moved to levels not seen since last year’s “super-spike” as a buying spree by the Philippines, the world’s largest importer, tightens the market.

Manila received offers on Tuesday for it to buy low-quality rice at about $630 a tonne, up 30 per cent from last month’s tender, and double the $320 a tonne seen earlier this year.

EDITOR’S CHOICE
Bullion drops for fourth session in row - Dec-08The many roads to food security - Nov-23In depth: Food prices - Apr-11The rally comes as global rice production is set to fall in 2009-10 for the first time in five years as a result of India’s driest monsoon in four decades, a series of typhoons destroying crops in the Philippines and droughts elsewhere because of the El Niño weather phenomenon.

“It feels a little like early 2008,” said Frederic Neumann, an economist at HSBC in Hong Kong, referring to the “super-spike” when rice reached a record $1,000 a tonne in April 2008.

The supply shortages have triggered concerns about a surge in food inflation in Asia, where rice is a staple. Darren Cooper, a senior economist at the International Grains Council in London, said: “Rice is obviously a political commodity in Asia.”

As prices soar, traders are worrying that policymakers could react with the same panic measures that fuelled the rally last year by hoarding stocks and imposing export restrictions.

“This highlights one crucial risk,” Mr Neumann explained. “Prices can quickly escalate if jittery consumers and public officials see supply risks looming, even if these are more perceived than real.”

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Some traders and policymakers said the supply and demand imbalance was real this time. Global rice output will fall to 432m tonnes in 2009-10, according to the US Department of Agriculture. With demand at 437m tonnes, stocks will drop from an already low level. But, more worryingly, the first signs of panic buying have emerged.

But other traders believe the panic is overblown, noting that stocks in key exporters such as Thailand are high despite a drop in global production.

Ben Savage, managing director of Jackson Son & Co, the London-based rice broker, said the rally could be short-lived. Traders said that except for purchases by state-owned agencies – including the Philippines and Iraq – global import demand is weak now as importers bet that prices could drop early next year.

The Philippines has scheduled three tenders for a record 600,000 tonnes each this month – equal to about 6.5 per cent of the world’s rice trade – as it races to build reserves ahead of presidential elections in May. Ludovico Jarina, deputy at Manila’s state grain agency, said that prices at Tuesday’s tender were “really high”.

The Philippines is securing supplies amid fears that India might import rice for the first time in 20 years after bad weather hurt the country’s agriculture, further tightening the global market. The USDA estimates that India’s rice crop will plunge by more than 16 per cent in 2009-10.

Additional reporting by Roel Landingin in Manila
Copyright The Financial

First, let me say that such natural disturbances in the food chain are normal and that is one of the reasons we (and yes, the government) should keep stockpiles.
That being said, I heard about the rice and that the price might go as high as 1,200 per ton. Wheat is another issue, as some fields here didn't get done in time and in europe, they have a rust going through it. On top of that, our lovely government has given away most if not all of our wheat storage. Corn to, is an issue with much of it being sold to be used in ethanol.
Let's not forget also, with the economy crashing, we will be seeing inflation as higher prices hit the food chain. Possibly, down the road, as credit is lost, there may be issues with transporting food and ingredients.

I've been grabbing a couple 5 lb packages every time we go to Aldis. Right now they're $1.99. That beats Sams Club pricing on 10 lb (4.88) and 50 lb (25.88) packages.

I'm always curious about the shortages in different crops, especially grains. Is it only a shortage until the next season comes in? That's assuming a second crop failure doesn't occur of course. Or even after the next crop comes in, will demand continue to remain high? Right now I figure the amount we have stored would last for a year if rice were an even larger part of our diet than it is now. We usually eat rice very regularly but not every day, and that same amount of rice would last much longer.

Kayleigh

when countries that normally produce large quantities of the worlds supply of say, rice, have crop failures such as North Korea, China, etc, this exact thing happens. Wheat, corn and soybean production in the midwest USA has suffered greatly by LOWER annual temperatures and massive rainfall. In turn, you will see ever increasing prices on everything you buy. Consumerism is a bitch......