By John Galt
August 14, 2011 – 22:00 ET
The experts keep telling us this doesn’t look like 2008 and can not possibly be a repeat.
However there is this story from the August 14th edition of Bloomberg/BusinessWeek (Click on the title to read full article):
Inside this story by Luzi Ann Javier and Supunnabul Suwannakij, the headline that rice stockpiles may increase by the smallest amount in five years pales to the information about further restrictions on exports and this gem from Southeast Asia from the story:
“World rice prices had been far more stable than other cereals,” said Concepcion Calpe, a senior economist at the UN Food and Agriculture Organization in Rome. “Now this is changing and rice is rallying, the international situation is likely to worsen. Wheat may become the stabilizing foodstuff.”
Thailand, the biggest shipper, is bringing back a policy of buying rice from farmers at above-market prices for storage. Exports from Vietnam, the second-largest, may drop 6.9 percent, according to the FAO. Farmers in the U.S., the third-biggest shipper, will harvest 20 percent less after planting more corn and wheat in response to rising prices, the government says.
Just great. One could simplify this by just digging the stories up from 2008 and changing the dates, however this chart of the September 2011 rice contract should remind everyone that everything is not under control despite the protestations of the Bubbleconomists:
As this story advances remember, the media has been preaching that everything is under control and food inflation will not be that big of a deal this autumn and winter. I have the feeling reality will dictate otherwise.
Got Uncle Ben’s?