March 25, 2013

The price of rice in China

Remember when that old ax was a reference to something irrelevant? Well, perhaps when we uttered those words we were being more omniscient than we thought.

Among the cereal grains rice and wheat are by far the most important to human survival. Each of those grains has shared a pretty much equal role in feeding the populations of the Earth. In 2007 Rice was grown on an estimated 260 million acres of land producing some 265.3 million tons of grain in 112 countries worldwide. The overwhelming majority of rice is grown and consumed in Asia, providing some 60% of the diet in Southeast Asia and about 35% in the southern and eastern Asian countries.

Rice accounts for 55% to 80% of the total caloric intake in Brunei, Vietnam, Laos, Bangladesh, Cambodia, Burma (Myanmar), Japan and Thailand, but regardless of per-person consumption the true read is in actual population and total consumption by density.

That list comes out a bit different. By far the greatest consumer (and producer) of rice is China. In those same 2007 data, China accounted for 112.4 million tons of rice consumed. Trouble is that the total Chinese rice production was only 69 million tons… over 43 million tons short of consumption… and that production is shrinking quickly. The problem is water. Rice needs lots of the stuff, and China is very quickly running out.

China’s population is growing and available water reserves are shrinking [PDF], meaning China will have more bellies to fill with less available rice. The solution currently is to import more rice, or to start switching grains and import wheat. Wheat is cheaper on the world markets but it is also the grain that supports roughly half the world’s population. An increase in consumption in China will likely spell higher prices and shortages for the remainder of the world. Either way China’s economy will support it… but what exactly will this do to the world’s food economy?

Population growth is doing a lot of damage to this old planet, and the price of rice in China is a fine predictor of the price humanity will be paying.  An aspirin in between the knees isn't going to solve this one.