Thursday, January 08, 2009

Great, lots of supply. But hey, why is price down?

HKTI chief Siswono Yudo Husodo is uneasy. The price of rice is decreasing (Kompas, 8/1/2009). If you recall, everybody has been happy with increase in rice production. Export is still constrained. And people like Siswono has suggested against too much export. Once he said we should only export quality rice (as if buyers are stupid). As for the domestic consumption, we all know its pretty stable. So here you go: supply increases, export is constrained, domestic demand is stable. What do you expect of the price?

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