James Stout

That means rice has been piling up across Asia, creating a short-term paradox.

Wholesale prices declining as production costs rise.

After a year of healthy harvests, traders are paying farmers less right now to hedge against future risk.

So this is a really complicated fucking mess, right?

What the New York Times is saying here is that buyers aren't buying the massive amount of rice that has already been planted, right?

Right.

But on the other hand, there is also now we're running into fertilizer shortages because of a bunch of elements for fertilizers that is used in a lot.

I mean, this is also affecting the United States, too, but it's significantly worse in places like the Philippines and places like Vietnam.

Some of the important elements needed to create fertilizer past the Strait of Hormuz, they're not getting through.

And this means that on the one hand, farmers are facing enormous rising production prices, but production is a process that takes place over and through time, right?

And this is something that very importantly, most economic models are really, really bad at dealing with.

Conventional macroeconomic models assume time and space don't exist to a large extent.

Like this is like a real issue for a lot of large-scale economic models.

Unfortunately, they exist here.

And so what we're dealing with

is that there has been production that's already happened because there already have been harvests.

But now, farmers can't sell the stuff that they've harvested because the transportation costs are so high that the buyers don't want to buy it.

But that means also, on the other hand...

Food is still getting more expensive on your end because even though the people making the food can't get enough money for the food they are selling, because again, the buyers won't buy it because it's too expensive.

You're now also paying like people in the region are now paying increased rice prices because they have to pay the shipping cost.