The war in Iran has pushed oil prices higher around the world. But a popular item in Hawaiʻi may see a boost in costs if the Strait of Hormuz remains blocked for a prolonged period.
Rice prices have not shot up like gasoline, at least not yet.
Supply is always an immediate factor in pricing. Right now, there's no global shortage of rice. In fact, there's a surplus — with stockpiles in warehouses from India to Indonesia.
Even in Japan, where rice prices spiked through the end of last year, supplies have now improved.
As for prices, some rose sharply earlier this month, but that's coming off some of their lowest levels in a decade.
For consumers, that may sound reassuring, but for farmers, it's a different story. While the prices they get for their rice crops have not gone up substantially, their fuel costs have.
And as decisions are coming for the next planting cycle, prospects for fertilizer prices are heading higher with each day of delay in the Strait of Hormuz.
The International Food Policy Research Institute wrote in a report this month that “the Hormuz disruption is a fertilizer supply shock, not a crop supply shock.”
Whatever the reason, the outcome means less profit for farmers planting rice; a disincentive to stick with that crop.
Fewer farmers planting rice could lead to supply issues, which over the longer term will push consumer prices higher — even in Hawai’i.
