Panic no answer to price rise

High energy prices pose a monumental challenge to economic growth. Everyone knows this. But high food prices stir more visceral fears. The concern today is that the world faces a serious crisis as a result of accelerating prices of food staples.

The conventional thinking is that we face runaway prices because of a crisis of shortage. This is partly true. The diversion to non-food use, like biofuels, of agricultural produce like soya beans has lowered supply for food processing. Drought and pestilence have lowered yield.

Wheat, soya and maize prices have all spiked because of one or a combination of these factors. But with rice, conventional thinking is off the mark; supply may not be as tight as prices suggest.