I am looking seriously at rice futures. About a year ago rice prices peaked. Several Asian countries, unable to produce adequate amounts for domestic consumption were forced to make large purchases, driving prices to record highs. Since then, rice prices have declined but not near previous lows. Last years purchases, along with the crops they were able to produce have been able to forestall further large purchases since then. Next year, they will likely have to make further large purchases.
Most land suitable for rice cultivation is already in production. Even with improved agricultural techniques there is a limit to how much nutrient rice plants can extract from the soil and turn into grain. Much of rice producing lands are in large, low lying Asian delta systems. Theses deltas are undergoing rapid erosion due to rising sea levels. There is less land available and the salinity of the ground water is increasing, making the prospect of much higher rice yields unlikely.
Most of the rice importing countries of South and East Asia have large, rapidly expanding populations of young median age. The governments of these countries are hoping that they will be able to increase rice production enough to feed the empty bellies of their people but how likely is this, really? I don't think it's very likely. Rice futures should be low in the coming Spring. I think there will be large purchases made next Fall.
This doesn't seem like that much of a gamble. The populations of these countries are growing. Rice production has been decreasing. Hungry people overthrow governments. It's cheaper for the governments to buy some rice than keep a bigger army to kill off the unhappy masses.
I think I'll buy rice. What do you guys think? Any commodities traders out there? Any Asian rice consumers that have insight into existing availability of rice in India, Myanmar, Bangladesh, Indonesia/Malaysia or the P.I.? Those few countries are home to two billion people. All of them eat a lot of rice.