Agricultural and Food Policy
 Agri Outlook Radio
Number 159
Why are rice prices so high and why are rice consumers from parts of the Caribbean,
to Asia, to Africa angry and/or even rioting over rising rice prices?
Part 1: An extended bull market in commodities (1:45 minutes)
Audio/Video Script:
Dr. Bobby Coats
Extension Economist and Professor
University of Arkansas, Division of Agriculture
Until proven otherwise I continue my assumption that we are building a
foundation for an extended global bull market in commodities. Said differently a
huge expanding global economy with an expanding appetite for commodities is in
the making.
Global demand for commodities is growing and with this demand global
investors and speculators find commodities an increasingly attractive
investment. This is especially true for rice.
Now consider that rice globally has been significantly undervalued for the
past seven plus years. Now consider world rice stocks are dangerously low and
world demand continues to rise with the global bull market for commodities in
the making. The consequence: explosive price strength is one outcome and
secondly, many of the world’s poor consumers, who spend a large part of their
income on food, are facing devastating economic hardship. They become angry with
riots being one consequence.
The poor have become casualties of the some of the global economy’s negative
problems. Credit problems, currency issues, and resulting inflation are good
examples.
This has been Bobby Coats Extension Economist University of Arkansas Division
of Agriculture.
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Food Policy Radio
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