Price of Rice

I wrote this article a couple of months back on my old blog and even though some of the information is little outdated, it is relevant. I was tempted to repost this article after reading Nita’s Society’s badge of honour in which she talks about being friendly to the environment as one factor. When it comes to caring about environment talking about food is as vital as talking about energy consumption. So here it is:

A few years back sometime around early 2005, the price of a 20 pound (about 9Kg) rice bag costed us from $10 to $12. Three years later the price of rice in this region has jumped almost a 100% and it now costs us $20 to $24 for the same amount of rice. I remember spending around 15 to 20 rupees per KG of rice in India in 2004 and I don’t know how much it costs now. There have been various theories going on in the media and I would like to summarize what I know over here:
1. Our quench for Fuel never subsides. We consume oil and now we want ethanol. How do we make Ethanol? Using Corn. So as the demand goes up for ethanol, farmers cultivate Corn instead of wheat and more corn goes towards fuel for cars than as food to humans. With lowered Wheat production (due to the cultivable lands going towards corn production), people substitute wheat with Rice causing a demand for Rice. This is the case in the US and Europe. I had already talked about Ethanol in one of my previous posts.
2. People of developing countries like India, China want better nourishment and hence the demand for good food (read Rice as staple food for most of Asia) has increased. Well, we can’t really blame them for wanting good food, can we? I have an interesting link on this topic
3. Hoarding. That’s right, merchants still buy Rice in bulk and store them in a secret godown which no one knows or can see, which is called Hoarding. They sell it when the demand goes up. Hoarding is a huge issue especially in India. I do not know about other countries but the Govt of India has promised to raid and capture all these hoarders. Another Govt. promise that no one knows what happens to it after a few months of promise. It simply gets replaced by other problems and people forget about it.
These are the 3 main things that any media conglomerate will state. None of the above points can really be controlled by an Individual like us. If you are not a Corn farmer, how can you stop the production of Ethanol? If you do not live in the so called Developing countries, how can you prevent a demand surge? and don’t even think of getting into a shady Godown and fighting our dear “Hoarder Merchant”, That can only happen in a Movie.
There is one important thing that not many talk about – Food Wastage. I only read about them in some blogs. In our normal life, we tend to waste food. I have done that myself before. We buy a lot of Grocery, use as much as we can and trash the rest. Sometimes, we trash a lot, we forget we bought those and we never use it and just trash it when it expires. Is this something we can quit doing? You are damn right. This is what we need to do as an Individual. It is an undeniable fact that we waste food and now is the time for us to look back and see what we bought and what we use.
– During your next Grocery purchase, buy only the things that you used. Be efficient and never allow food to go wasted. By wasting less, we can have a huge impact on the price of food. You will be sending a direct signal to the economy that you are consuming less, there by the demand is less. You do not need to starve to lower the demand, but definitely avoiding food wastage will help it a lot. If you go to a restaurant, make sure you pack the left overs and eat them the next day. Go ahead give it a try. You will also save some money in the process.
– Avoid Impulse buying. When you go to grocery stores especially in developed countries, it is not uncommon that items are placed in strategic positions to increase sales and we know how much of an ordeal it is to buy Groceries here. We tend to have a lot of stuff in our cart that we didn’t intend to buy at all and this remains one of the main causes of food wastage. Stick to the list and you will save money/avoid food wastage.
– Avoid Panic Buying. Just because a Rice bag now costs you $20 and you expect it to go up, don’t go hunting around stores and stock up on rice. You are causing the conditions to get worse by creating artificially pent up demand. Sam’s club (A big wholesale grocery store in US) has done the right thing by rationing 4 bags of Basmati rice per customer. But we are geniuses, so we still stock up on rice by visiting multiple Sam’s clubs in that area. If you want the situation to improve, please stop carting out all the 4 bags from all of your local Sam’s club. Hey, if you buy so many bags there are chances of infestation, if you do not store the Rice bags in proper storage place.
– Consume lesser rice and substitute with Fruits and Vegetables. Well, one good reason to go healthy. Everyone knows too much of rice is not good for the body, so why not take this as a chance and replace one serving of your rice with a fresh salad (veggies or fruit). You will bring down the demand for rice and increase the demand for other vegetables, but overall it should work out fine.
If you have any thoughts yourself, Please leave it in the Comments section. Good ideas are always welcome.

5 Comments Add yours

  1. Pingback: Price of Rice
  2. Every time I hear about that comment on Asia’s increasing food consumption, it makes my insides cringe!

    You’re bang on about food wastage. As Indians it’s instilled up on us at a very young age that wastage of food is like throwing away money and hence dishonoring Goddess Lakshmi. Whatever be the story, today I can understand the macro-economical impact of a whole nation trying to limit wastage of food.

    ps: The price of rice hovers between Rs. 18 and 23.

  3. Dinesh Babu says:

    Arthi – Welcome to my blog. I agree with you, there is no finger pointing needed towards the developing Asian nations. I have also read in a few places that in the western countries as much as 30% of food are wasted in Restaurants, Grocery stores and at homes. Just unbelievable! Thank you for letting me know the price of the rice in India.

  4. Mahesh says:

    Hi all,

    I read this blog now. the price of rice now is 34 to 38 INR per kg. We are in economic slow down, even now the price of rice is rising relentlessly. Any reasons for this.

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