Friday, March 8, 2013

Increased Demand for Rice

The Wall Street Journal has a nice article on changes in the rice market.  In the article we see that China is changing from an exporter of rice to an importer of rice due to increased demand for rice - most likely due to higher incomes and changes in preferences between domestic rice and foreign rice.

An alternative explanation is that the prices set by the Chinese government are higher than international rice prices for similar types of rice, and buyers of the lower priced imported rice can re-sell at the higher price floor to domestic consumers at a rather easy profit.

Most likely - it is a combination of the two.

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