This past May, The USDA released the publication “Factors Behind the Rise in Global Rice Prices in 2008” by N. Childs and J. Kiawu. The authors reviewed long and short-term factors that caused the increase in rice prices. They concluded that the most important factors behind the recent increase in price were export restrictions by major suppliers, panic buying by several major importers, a weak dollar and high oil prices.
It is interesting to note that the increase in prices occurred during a year of record global rice production, larger supplies and buildup in stocks.
The authors state that in the future, sudden drastic increases in the price of rice will be less likely to occur as export restrictions are lifted and global rice yields increase. They also mention that the adoption of genetically enhanced (GE) rice could contribute to reduce the likelihood of rice price spikes. However, because major rice importers are not willing to accept GE rice, the adoption of GE rice will likely not happen in the near future.
The complete report can be downloaded from the following Web site: http://www.ers.usda.gov/Publications/RCS/May09/RCS09D01/.