The rice led inflation

It is getting real now, very real. We have been suffering from the inflation since last year. But, this has been getting a little bit out of hand now.

Here is the sequence if I recall correctly

1. High mid end property speculation. Suddenly the property market is so hot, everybody wants to get a piece of it. Of course the HDB rent also went up. More foreign influx contributed by the red hot economy. But I don't really think my salary increment is so significant or I got so much bonus that this is worthwhile.

2. Oil price and transport cost. This is hardly surprising as we witness the big surge of oil price. The transport cost went up significantly and unknowingly all goods price also quietly goes up.

3. Food prices increased. We have flour, corn, soya, what ever things that you could eat all went up. If you go one round in the hawker centre, you could notice many prices change.

Up to this point, I am already worried. Because I don't think my salary could catch up so fast with all these prices. Then, the KO hit comes, the price of rice also going up!

Actually, it is not difficult to predict the day may come where everything goes up. But, of course, we pray that it never comes. In very simple economics, demand outstrip supply. Where does the extra demand comes from?

1. Extra population and the getting rich Asia generation. They consume more goods.
2. More investment fund or hedge fund are getting into the commodity business. I would think they are the main culprit who push up the price so significantly.

There are two parts to this demand = (1)real demand + (2)speculation.

Where does the supply goes?

1. As the developing country advances, more farm land converted to industrialised land
2. The crazy oil price causing crazy people to turn food crop into bio fuel

I feel we can still walk without oil, but we cannot survive without food.

What do you say? More points to add to this demand + supply equation?