Factors behind the record highs in rice prices last year

Very interesting report released by the USDA explaining why rice prices tripled last year. The question is why these factors could not be in place again in the near future to push prices up near record highs?

Fran Bougain for AgFood Think Tank

Global rice prices rose to record highs in the spring of 2008, with trading prices tripling from November 2007 to late April 2008. The price increase was not due to crop failure or a particularly tight global rice supply situation. Instead, trade restrictions by major suppliers, panic buying by several large importers, a weak dollar, and record oil prices were the immediate cause of the rise in rice prices.

Because rice is critical to the diet of about half the world’s population, the rapid increase in global rice prices in late 2007 and early 2008 had a detrimental impact on those rice consumers’ well-being. Although rice prices have dropped more than 40 percent from their April 2008 highs, they remain well above pre-2007 levels.
Released Thursday, May 7, 2009

Click for the complete report

Source USDA