REIS

Food prices rise to fresh record high

Analysts warn of further increases

• FT: "Indonesia battles rice shortfall"
• IIFL: "Rise in rice prices"
• Daily Star: "Rice caught in fog of info "
• ANN: "Rice prices hit record high in Bangladesh"
• Daily News: "Rice mill registration made compulsory "
• Reuters: "India food measures disappoint farmers, retailers"
• Pakissan: "Heavy rains brighten prospects for Fiscal yr11 Rabi crops "
• Swazi Observer: "Market price for locally produced rice too low"

Jim Rogers empfiehlt von Gold in Reis „zu rotieren“.

http://www.faz.net/s/...7C89BDFDAE8692D497~ATpl~Ekom~SKom.html#536359

Global Food Prices: Five Reasons to Buy Rice Futures

The world is finally waking up  to the fact that global grain prices are destined to head higher - much higher.

Nasty weather in key  agricultural markets around the world has savaged  the global grain crop,  meaning worldwide supplies can't help but be  squeezed. Australia, for instance,  isexperiencing  additional flooding

in areas that were already battered by the torrential  rains of November, December and January.

And as if the supply-related  increase in agricultural commodities  wasn't enough, there's also the U.S.  dollar - and the so-called "race to the bottom

"  - to contend with. Make no mistake: The endless devaluations in the greenback

are

having a worldwide impact on agricultural commodity prices. Since  commodities  are priced in dollars, these devaluations translate into  higher prices for  grains and other food-related commodities.

Short supplies and rising prices are bad enough, but  concerns about  these first two realities are creating an additional catalyst  that  completes a trifecta for higher agricultural commodity prices.

And that third catalyst is panic buying - especially with  rice, which is a basic table staple in Asian markets. For instance,

The  Saudi Gazette last  week reported

that Bangladesh recently tripled its rice-import target and  Indonesia  just purchased 820,000 tons of Thai rice, nearly five times the  volume  initially sought.

"This is only the start of the panic buying," Ker Chung  Yang, a  commodities analyst at Singapore-based Phillip Futures, said in

The  Gazette

report. "I expect we'll have more countries coming in and  buying grain."

For global investors, there are five reasons why it's  definitely time to buy rice futures.

Five Keys to Higher Rice Prices

Global food prices

in January - reaching their highest level since the United  Nations'  Food and Agriculture Organization began to track them in 1990. They   even topped the previous highs set during the global food prices scare  of June  2008.

"The new figures  clearly show that the upward pressure on world food  prices is not abating.  These high prices are likely to persist in the  months to come," said  Abdolreza Abbassian, an economist for FAO, which  is based in Rome.

Food-price inflation has become  a major issue in the world's emerging  economies - particularly those in Asia.  Those inflationary pressures  are now threatening to ignite a rally in rice  prices - even though  bumper crops  in Thailand and Vietnam

there  will be ample supplies.  Instead, the following five reasons almost  assure us of increased rice prices  by the end of this year.

Rice prices will  increase because:

• The aforementioned huge  early Asian crop is allowing U.S. farmers to shift to planting higher-margin  grains
• Panic buying by  consuming nations trying to fight food inflation will escalate the price of  existing supplies.
• The weather effects of La Nina are continuing to  affect historical rain patterns.
• We expect an actual  imbalance between world supply and demand by the end of this year.
• The United States is  exporting inflation to the rest of the world, and will continue to do so  for the rest of 2011.

Thailand's benchmark 100% "B" Grade white rice was offered  at $540 per  ton last week. That price is unchanged so far in 2011 - after  having  fallen 13% last year. During the 2008 food crisis, rice prices exceeded   $1,000 a ton - a spike in food prices so severe that the head of the  United  Nation's World Food Program said it was causing a "

" of hunger to sweep the globe.

While the Westernized nations  continue to feel the effects of  deflation and de-leveraging, emerging-market  economies are having  almost the exact opposite experience. And rice prices may  be the ideal  way to illustrate this economic disparity.

You see, rice is a staple food for half the world's  population -  particularly in Asia. And though there's a huge-and-growing middle   class in Asia, there are still millions of households that exist at or  near the  poverty line. A big run-up in rice prices would squeeze their  budgets and  topple them into poverty - causing a wave of unrest that  the governments of  those countries would do almost anything to avoid.

Under normal circumstances, the  inflationary effects we're seeing would  not be as damaging to the world food  prices. But we are in a major  global weather pattern shift that has changed the  rain patterns around  the world.

is causing heavy rains to locations that normally experience  little to no rain. This has caused  flooding in such

as Australia and Brazil. It has affected the monsoons of India and  weather conditions on the U.S. East Coast.

Rice analysts have labeled  price inflation as a "near-term" event,  stating that an expected surge in rice  supplies provided by a strong  harvest would halt - and ultimately reverse - the  current run-up in  prices.

But the supply increases won't  be as large as these analysts expect.

The U.S. Wild Card

The price increases in grains  have led the United States to shift its  historical growing averages. In terms of the global pecking order among   rice exporters, the United States typically ranks as the No. 3 or No. 4  largest  exporter.

But not this year.

In 2011, U.S. farmers are  shifting to other crops, hoping to capitalize by boosting their output of  soybeans over rice.

In fact,

that U.S. farmers will plant the fewest acres of rice crop since  1989.  And with good reason: other grains have better profit margins than  rice,  especially since Asia's largest rice growers have a "bumper crop"  coming to  market this year.

"Why would you want to take  that risk to plant rice, knowing that  your income is going to be way down?"  Terry Hatley, an Arkansas farmer  who this year may not plant rice for the first  time in three decades,  told a

reporter. "Farming is a  business, and you've got to look at the economics of it. Now, the economics on  rice are very dim."

Because the U.S. crop lags its  Asian counterparts, such changes in  planting plans by U.S. farmers will affect  worldwide rice supplies in  six months to nine months.

The "Egypt Effect"

The uprising in Egypt has been  directly linked to the cost of wheat, as  Russia was the supplier of wheat to  the Middle East region. This  historical  relationship was put into doubt when Russia cancelled its  exports of grains  last summer.

Egypt has started to go into  the spot market to purchase more expensive  wheat to feed its growing  population. The uprising is going to  play  havoc with additional supplies arriving and being distributed to the   hungry population. And Egypt is not the  only nation that has had to  make large bulk purchases of food to try to meet  domestic demand.

Take Indonesia, which is the  first of many nations to come to market in  an attempt to make  larger-than-normal purchases of a particular  commodity. In large part because  of runaway food prices, Indonesia is  facing an inflation rate of better than 7%  - in a year in which the  inflation rate had been expected to decline.

Cheap rice has risen 22% in the  past year. Cooking oil jumped 15% and  various types of "chillies" zoomed  between 90% and 314%,

newspaper reported.

Now the largest economy in  Southeast Asia is importing rice in bulk for the first time since 2007. And

recently made an  emergency decision to temporarily halt import duties  on foreign supplies of  rice, soybeans and wheat to ease food prices and  take the sting out of  inflation.

In fact, as a longtime observer  of the global markets, I've found it  interesting to observe the differing  strategies that governments around  the world have resorted to as they respond  to the events in Tunisia  and Egypt.

After the global food prices  scare of 2008, authorities around the  world were aware of the risks and better  prepared to cope with rising  food costs this time around, says Indonesia  central bank spokesman Difi  A. Johansyah.

"We expect food prices can  be controlled so they won't raise inflation expectations," he said.

Indonesia President

said that possible steps to avoid a food crisis included waiving   value-added taxes or import taxes for rice and cooking oil, maintaining   sufficient stockpiles and preventing smuggling or hoarding.

Countries that operate under an  autocratic government are announcing  changes in their governments in an attempt  to address the anger of a  population that has no real say in deciding who will  lead them.  Shuffling the deck chairs on  the Titanic has not fixed the problems  before, and it won't make a difference  today.

The people are experiencing the  pain that accompanies big increases in  staple food prices. In such situations,  it's the price of the calories  that drives the anger. And a fear of that anger  will continue to induce  governments to make the kind of hasty decisions that  actually  exacerbate the problem.

As investors in capitalist  markets who will also feel some of that  pocketbook pain, we have the ability to  improve our lot by making  investments that can offset the price increases. And  we should make  those moves now.