: I am Worried About Rice

Dec 28 |10:25

I am worried about rice.The last half of 2007 had me terribly worried about mortgages and sub prime markets and my industry. A lot of the damage was done by Wall Street trading and greed that came from it.Now it seems that Wall Street and hedge funds have a new game to play. Trading in rice futures is becoming increasing popular and is driving the price of rice up.This is a growing concern for countries in the developing world that depend on rice.
     As the cost of rice goes up, this food staple for the worldâ€™s poorest will become increasingly difficult to come by. Rice will become a monetary commodity for the rich rather than a life commodity for the poor. Already limited by poor crop seasons, and by decreasing crop size to replace with more profitable harvests such as corn, the price is bound to go up more.
     The cost of oil has gone up, which makes the cost to produce and ship rice higher. Rice is traded in US Dollars. The value of the Dollar has gone down, which makes the cost of rice go up.
     Our food prices have gone up about 4.5% this year alone. The cost of food in developing nations will go up an additional 9% this year. Approximately 40% of household income in third world countries is spent on food as compared to the USâ€™s 18%. I am sure this 18% does not factor in McDonalds and Starbucks. Higher prices mean less food in Africa, less trips to Starbucks (maybe) here.
     So, if you ask me if I will continue to worry about the mortgage industry and how it affects real estate, I might take a break from that for a while.We have a choice and we have a say. They do not. I am worried about rice.
-Dale Siegel

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