Rice Price Shock Shocks Asia

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You will be happy to hear that the people of Thailand are very concerned about Wall Street.
The country is still recovering from its own financial crisis- the collapse of the Thai Baht in 1997, that took much of the domestic economy down with it- and it is deeply concerned about the economic condition of the United States. The collapse of Bear Stearns and the seemingly bottomless losses at other investment banks and brokerages have captured Thai attention, imagination and sympathy.
At least until today, when Thais turned their eyes back on Asia after a bid from their ancient rival, Vietnam, shook up the rice markets. Rice exporters have lately been bidding to fill the demand from the Philippines, which is said to require at least 500,000 tones of rice on this go around. For medium quality rice, $900 per ton is what $100 a barrel was to light sweet crude: a psychological breakpoint. Vietnam just asked for $1,200 per ton for 25% (read: pretty crappy) rice.
That price has sent shock waves across Asia. There is widespread fear that this may foreshadow a price explosion, particularly in higher quality rice. Here in Thailand, where the phrase "to eat" literally translates as "to eat rice", the price of rice is rather a serious matter.
The irony of Vietnam- the once communist foe of Asian market economies- pushing the rice price envelope is not lost on the Thais. But they do seem to miss the irony implicit in the criticism by countries with market-based economies leveled at Vietnam for offering rice at a price that the market- if not Thai psychology- demands.

- John Carney, DealBreaker's Editor in Chief, is presently cornering the rice market while on vacation in Thailand.

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