Business Week has a nice summary just posted of the rice crisis:

http://www.businessweek.com/globalbiz/content/apr2008/gb20080428_894449.htm

Rice is obviously one of the most important crops in the world, and has been for a very long time. Much of the worlds poorest populations, particularly in Africa and Asia depend on rice as the primary staple their daily diet.

submitted by Dave

Rice prices have soared tremendously, one statistic in this article is particularly telling I think: Rice from Thailand was priced at $320/ton at the end of last year. Now, a mere four months later, it is $1100/ton. Thats more than a 300% increase! The article points out that most rice is not traded, but consumed domestically.

One thing that is not really discussed in this short summary however is the impact on urban poor. As we all know, urban areas in Africa and particularly in Asia are drawing many people from rural areas. Imagine the impact on these people who spend a large portion of their budget on food, particualrly rice. This is also putting pressure on the very organizations that provide aid for the world's hungry. Estimates are that this spike in rice prices will push an additional 100 million people into starvation conditions. Thats the equivalent of one third of the U.S. population that could feed itself before, but now will be unable to feed itself.

Some other interesting points brought out in this short peice: the role of speculators and the impact of export restrictions imposed by India and Vietmnam (the second and third largest exporters of rice respectively). These measures backfired and encouraged speculators to horde rice. Speculators are playing a big role in making this problem worse, much as they do in the oil markets.

Finally, high oil prices and the drive for biofuel are also contributing to the escalating rice crisis. Because so much corn is being grown for ethanol in the US, that decreases the amount of wheat that is planted. Higher wheat prices makes more people turn to rice for their needs, this increases demand for rice and the price for it.

This problem has the potential to get far worse, lets hope that somehow the price goes back down or at least stabilizes. If it doesn't we are looking at a humanitarian disaster of epic proportions.