U.S. dollars. It is observed that the price in U.S. dollars fluctuated around a
mean of about $8 per hundredweight before it rose sharply in 2008. Most of
the rice is produced and consumed in Asia. If rice is priced in terms of gold,
one would find that the real price of rice declined drastically from its 1969
highs to its lows in the 1980s, and has stayed relatively flat from the 1980s
until today—even with the much-advertised commodity price increases of
- The real prices of agricultural commodities in the world have been
declining. This, coupled with the less expensive agricultural products—mainly
wheat—available from the larger developed exporting countries such as the
United States and France, has made it less attractive for farmers in the world
to produce basic foods such as wheat and rice. Instead, they prefer crops that
will provide more cash, such as the farmers in Afghanistan who preferred to
cultivate opium over food. Please see Exhibits 5.15 and 5.16.
On the other hand, if we price rice in terms of wheat, we find that the
wheat/rice price ratio has been declining. Wheat is mostly produced in
Western developed economies, but it is consumed by foreign developing
countries. It is recommended that more research be conducted to find out
why. Please see Exhibits 5.16 and 5.17 for a comparison.
EXHIBIT 5.15 Rice prices, 1968–2008.
120 THE ART OF ISLAMIC BANKING AND FINANCE