The picture and chart are from one of two rice articles I found today in the WSJ.As you can see the price of rice has sold off about as quickly as it lifted at the very end. There is nothing too unusual about that sort of chart action during manias.
While I do not know where the decline stops I think it is a good bet that the selling will slow before the price gets back to the levels it was late last year.
Not long ago rice was at $10 so obviously even if this correction goes all the way back to $15 that leaves it 50% above where it was.
That probably means the panic and rationing would be over but as I mentioned a few weeks ago the longer term consequence of a 30-50% rise could turn out to be meaningful.
I think this is something to pay especially close attention to.
2 comments:
From the point of view of a poor country, does the difference between $20 and $24 mean much? that's still a steep rise.
Interesting pic; I'd wondered how rice is harvested. Looks like a standard grain header. I'd assumed the ground would be too wet to use a combine, but guess not.
A good article here on commodity ETF's:
http://tinyurl.com/3q3q5h
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