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The Price Of Rice

There is havoc in the markets for rice and other important staples like palm oil all over Asia and Africa. There is also panic in some streets. Even in America the cost of basic foods has been rising for months. Not exactly that there is hysteria in the U.S. But clearly many Americans are aching.

The drama is clearest in Asia where bans on the exportation of rice have been put into immediate effect. And a reduction or complete suspension of import tariffs on other foods. This seems like an auguring of the old Malthusian nightmare. If you want a basic guide to what's going on read the first page story by Alan Beattle in Wednesday's FT.

But there is a twist to old Malthusianism. As people have been getting richer, let's say in China and India, more people are eating more rice.  Thus, there is more demand for rice. Much more demand for rice. This means that there is no longer enough rice for the poor hundreds of millions who are being priced out of the market.

In the western countries there is a shortage of cash. In the other countries there is a shortage of rice.