"In every country, the poor are the suffering victims of inflation," Chinese American Yuan Qi grumbled in a telephone call to his wife in San Francisco when he stayed in Beijing on a business trip.

His wife had told him that rice was not available in some outlets. America, the largest rice exporter in the world, has seen shoppers scrambling for rice in the supermarkets. According to the World Bank, soaring food prices have spawned social instability in dozens of countries, even causing the Prime Minister of Haiti to stand down.

Prices of some staples including corn, wheat, soybean and rice have hit record highs. Many analysts are predicting that the age of cheap rice is gone forever.

Fortunately, China currently has sufficient stocks of staples. Although the renowned crop researcher Yuan Longping has urged caution on the subject of domestic food reserves, the National Development and Reform Commission says that China has the ability to guarantee security of food supplies.

However, China is not completely insulated from the international turmoil. The surging rice price in southeastern Asia is having a ripple effect on southern China and has prompted the government to take urgent measures to keep the price down.

The stage has been set for a battle over rice. The Bush Administration blamed the price spike on the growing prosperity of India. In response, the Indian Finance Minister observed that such a statement was a cruel joke, arguing that the fault is with America's diversion of crops to make biofuels.

Japan, which relies heavily on food imports, has felt the weight of the impact. Some supermarkets there are in dire need of new food stocks. This is the first serious food shortage in the last four decades. NHK, Japan's public broadcaster, last year shot a documentary about soaring food prices and concluded that finance magnates are wielding their influence on the price of crops just as they do in the stock market.

China has a slightly different perspective, although the Vice Minister of Agriculture Niu Dun agreed that Western developed countries should shoulder the blame for the food crisis. "First they take radical measures to obtain energy, bringing pressure on agricultural production and using large quantities of crops to develop biofuels, and then speculators pile into futures, driving the price high," he analyzed.

The crisis will pit the world's 800 million car users against 2 billion who can barely keep body and soul together. The United Nations Food and Agriculture Organization estimates that the current bout of inflation has forced over 100 million into hunger.

The British media provided a useful insight into the situation. On May 4, 2008, The Independent on Sunday revealed that international companies engaged in agriculture are making a killing in the crisis, citing as examples the mighty Monsanto Company, whose year on year profits have more than doubled in the first quarter of 2008, and Cargill, whose profits have increased by over 40 percent.

For the most part farmers haven't benefited from food price increases. Instead, the profits are flowing into the coffers of a handful of tycoons, said Benedict Southworth, director of the World Development Movement.

(Source: China Youth Daily, translated by He Shan for China.org.cn, May 13, 2008)