Rice Crisis Forensics: How Asian Governments Carelessly Set the World Rice Market on Fire

Tom Slayton ()

No 163, Working Papers from Center for Global Development

Abstract: The world rice market was aflame last spring and for several months it looked as if the trading edifice that had exhibited such resilience over the last two decades was going to burn to the ground. World prices trebled within less than four months and reached a 30-year inflation-adjusted high. Many market observers thought the previous record set in 1974 would soon be toast. The fire was man-made, not the result of natural developments. While the governments in India, Vietnam, and the Philippines did not to set the world market on fire, that was the unintended result of their actions which threatened both innocent bystanders (low-income rice importers as far away as Africa and Latin America) and, ultimately, poor rice consumers at home. This paper describes what sparked the fire and the accelerants that made a bad situation nearly catastrophic. Fortuitously, when the flames were raging at peak intensity, rain clouds appeared, the winds [market psychology] shifted, and conditions on the ground improved, allowing the fire to die down. It remains to be seen, however, if the trading edifice has been seriously undermined by the actions of decision makers in several key Asian rice exporting and importing countries. In describing the cascading negative effects of these seemingly rational domestic policies, this paper aims to help policy makers in the rice exporting and importing nations to avoid a repeat of the disastrous price spike of 2008.

Keywords: rice; inflation; prices (search for similar items in EconPapers)
Pages: 43 pages
Date: 2009-03
New Economics Papers: this item is included in nep-sea
References: Add references at CitEc
Citations: View citations in EconPapers (52)

Downloads: (external link)
http://www.cgdev.org/content/publications/detail/1421260

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cgd:wpaper:163

Access Statistics for this paper

More papers in Working Papers from Center for Global Development Contact information at EDIRC.
Bibliographic data for series maintained by Publications Manager ().