world growth

world growth

Monday, June 9, 2008

A Black Market Grows In Rice

Food will become oil in future ! In fact food is more important than oil, because you can liveout oil, but not without food.

A Black Market Grows In Rice

Shu-Ching Jean Chen, 05.01.08

http://www.forbes.com/2008/05/01/asia-china-rice-markets-comm-cx_jc_0501markets1.html

HONG KONG -
With grain prices surging and major producers restricting exports, a lucrative illicit trade in rice and flour has emerged in Asia.
The biggest opportunities may be in China, the world’s largest rice producer, where grain prices are among the lowest in the world due to a combination of domestic subsidies and export curbs.
Reports of rice smuggling have surfaced this week in areas all along China's sprawling borders, from Yunan province next to Vietnam, to northwest Xinjiang, which borders the central Asian states of Kazakhstan and Kyrgyzstan, all the way to Guangdong, a prosperous southern Chinese province that sources 60% of its rice from elsewhere in the country. Smuggled Chinese rice has turned up in Hong Kong and Macau, where prices are in line with international rates and there has been panic buying. So far, Chinese customs officials have described the incidents as isolated, but increasingly the authorities are worried about the potential for an expansion of smuggling should price gaps widen further.
Smuggling is occurring across Asia due to price disparities between major grain-producing countries, where domestic prices are being kept artificially low, and the region’s major importers.
...

In the case of China, the root cause of smuggling is obvious: Prevailing international rice prices are as much as four times higher than in China; the price of wheat, more than twice as high.
China accounts for nearly a third of total world rice output.
There's no reason for China to worry that the smuggling will take food out of the mouths of its citizens. Four consecutive years of ample grain harvests have not only allowed China to meet its self-sufficiency goal of satisfying more than 90% of domestic demand, but also to build up massive reserves.


...

No comments: