Rice: the impact of the Thai floods on the crop price

November 12, 2011-The Economists published an article discussing how serious the impact of the Thai floods in late July be on the price of rice. As the world's largest rice exporter, Thailand provides about one third by volume of all internationally traded rice, approximately 20.3 million tonnes per year. Speculators may suspect the price of rice to soar immediately given the decrease in supply. Although this may be true, this article also suggests that rice is, in fact, a special type of crops that it is consumed where is grown. This implies the minimal effect of the Thai flood on the amount of rice consumption outside of Thailand. Although this article focuses on the effect of the Thai flood on Asia, I was able to see the connection between the decrease in rice supply and the American economy. As rice exports from Thailand decreases, it is reasonable to suppose that it could benefit the U.S. domestic rice price (increase in domestic demand of U.S. rice) as well as rice exports to nearby countries that no longer deem transporting the rice from the far Asian regions to be worth while.

http://www.economist.com/node/21538099