The Rice Panic of 2007

On November 4, 2011, NPR’s Planet Money did a “blast from the past” podcast reviewing the course of events that led to the rice panic of 2007 and its eventual end. From India’s decision to ban rice exports to hoarding across Asia to corrupt government manipulation in the Philippines of a then vulnerable rice market, we get to reminisce about how rice prices doubled ad then almost doubled again in just four months. The panic finally ended after economists convinced the U.S. to allow Japan to sell its stockpile of rice that it maintains as part of a trade agreement that forces Japan to buy rice from the U.S. it does not want. Ironically enough, the rice was never sold but the psychological impact of the announcement was enough to end the hoarding and bring the market back to a semblance of sanity.

A truly fascinating tale of a completely avoidable bubble in the price of rice.


U.S. Imposes Anti-Dumping Duties on Chinese Steel Grating

The Commerce Department’s International Trade Association issued a preliminary finding determining that Chinese companies are dumping steel grating into the U.S. market. Four companies will be charged with an anti-dumping duty of 14.36% while all other Chinese producers/exporters of steel grating will be charged 145.18%.

The U.S. imported $90.7M of steel grating in 2008. Alabama Metal Industries Corp (AL) and Fisher & Ludlow petitioned in this case.

Commerce reports the products covered under this preliminary finding as follows:

“…certain steel grating, consisting of two or more pieces of steel, including load-bearing pieces and cross pieces, joined by any assembly process, regardless of: (1) size or shape; (2) method of manufacture; (3) metallurgy (carbon, alloy, or stainless); (4) the profile of the bars; and (5) whether or not they are galvanized, painted, coated, clad or plated.”

U.S.-China trade tensions escalating; United Steelworkers eyeing paper, glass, cement imports.

Last week, the U.S. Commerce Department  announced it was considering imposing a tariff of nearly 100 percent on imported Chinese pipes used to transport water, steam, oil, natural gas and other liquids and gases. China says the complaint is groundless.

The new dispute comes after  last month’s announcement by President Barack Obama of a 35% tariff on Chinese-made tires. That tariff has already led to increases in tire prices here.  China threatened to retaliate by imposing tariffs on American automotive products and chicken meat

The president of the United Steelworkers union said last month that it is interested in pursuing trade complaints in other sectors:

We’re looking at what’s happening in paper sector, glass, cement, steel. That’s our obligation to our members,” said Leo Gerard, president of the 850,000-member United Steelworkers union that represents workers in numerous industries and brought the original case against Chinese tires.

Domestic political considerations apparently influenced the previous U.S. administration’s trade policies. It’s likely that such considerations will come into play once again. (Pennsylvania has 21 electoral votes.)

President Obama is scheduled to visit to China on November 15-18. Trade is expected to be a major topic of discussion.