For a long time, we lived in a world where there was always enough of everything and it seemed that individual products were produced directly in the stores, because there were actually no shortages or sharp increases in the prices of globally popular foods for decades.
Trade barriers arise
But those times seem to have passed and many want to play in their own sandbox rather than act in the interest of all. Literally, a huge shock was caused by India some time ago with its ban on the export of rice, which was already at its peak in price at that time, and since then it has added tens of percent more. Despite the fact that for the only type of rice that is still allowed to be exported, which is our favorite basmati rice, minimum prices have been set that are quite high.
The largest producer of rice is not surprising in its own way. As a result of the poor harvest, rice prices on the local market began to rise rapidly, and the authorities decided to protect their residents from further unexpected price increases. And so it happened that the export was banned.
However, this immediately set off shock waves in stores all over the world. There was panic buying in Canadian and American stores. And to make matters worse, Myanmar, another major exporter, also suddenly banned exports.
A crop viewed with concern
But this is quite possibly just the beginning. Farmers around the world are worried about the impact of the growing El Niño weather phenomenon in the Pacific Ocean on next year’s crops. Key Asian suppliers are placing an increasing likelihood that prices will skyrocket again.
It is necessary to realize how serious a problem we are talking about here. If El Niño hits South and Southeast Asia hard, it could cause a major shortage of rice in global markets. This region is responsible for 58% of global production and even 80% of all rice exports. As it turns out, the probability of a strong El Niño has increased to 71%.
Therefore, it is not too surprising that people are trying to stock up, since rice, or other foods that suffer from insufficient harvests and their prices increase, can be stored relatively well for a longer period of time. However, stockpiling doesn’t help much overall, because then there can be outages.