READ HERE: “Go Easy On The Curry”: HSBC Warns Rice Crisis Reminiscent Of ‘2008 Asian Food Price Scare’
Frederic Neumann, Chief Asia Economist at HSBC Global Research, highlighted in a note to clients Friday that skyrocketing rice prices present hurdles for central banks combating high inflation. He drew parallels between the current surge in food prices and the one that rocked the world in 2008, noting that shortage fears are rising for the staple food that feeds billions of people.
“The memory of the 2008 Asian food price scare sits deep,” Neumann wrote.
He said, “Back then, rising rice prices in some economies quickly spilled over into other markets as consumers and governments across the region scrambled to secure supplies. It also lifted the prices of other staples, such as wheat, as buyers shifted to alternatives.”
Rice from Asia accounts for about 90% of the global production. The El Nino weather phenomenon has sparked heavy rainfall and droughts across top-producing regions, such as India, which has imposed export restrictions to ensure adequate domestic supplies.
We provided readers with enough understanding that rice, which is critical to the diets of billions of people worldwide, was headed for a shortage:
- Sept. 2022: The Stage Is Being Set For A Massive Global Rice Shortage
- April 2023: “We’ve Been Warned”: El Nino Watch Initiated As Ag-Industry In Crosshairs
- May 2023: Global Rice Shortage Looms, Set To Be The Biggest In Decades
- May 2023: Thai Rice Crop In Crosshairs Of El Nino As Farmers Are Warned About Water Shortages
- August 2023: Rice Crisis Sends Prices To Highest Levels Since 2008
To Neumann’s point about spillovers, take a look at Indian shoppers panic buying rice at US supermarkets in July as they got word from overseas that India was imposing rice export restrictions. Maybe these Indian preppers are on to something…