Two major US retailers ration rice amid global food crisis
by Virginie Montet
Thu Apr 24, 2008
WASHINGTON, (AFP) - Two major US bulk retailers are rationing the sale of large bags of rice to consumers amid a growing global food crisis marked by skyrocketing prices and heavy pressure on demand.
Sam's Club, a chain owned by retail giant Wal-Mart, announced Wednesday it was placing a limit of four 20-pound (nine-kilogram) bags per person for imported jasmine, basmati and long grain white rices as a "precautionary step."
"This temporary cap is intended to ensure there is plenty of rice for all our members," said Sam's Club, which has 600 stores across the United States, adding that the measure did not apply to smaller bags of rice.
The move follows similar steps taken by its main rival, Costco, which has also limited the sale of rice in its stores.
Both companies insist that they have plenty of rice but say the steps were necessary to ensure there was enough for all of their clients.
The measure appears aimed at preventing over-stocking among customers concerned by the surging prices of commodities worldwide.
Small restaurants and businesses fill their freezers and pantries with products from big-box retailers such as Sam's Club and Costco.
"There is no rice shortage in the US," said David Coia, a spokesman for the industry's USA Rice Federation.
"What happened is because of perception of problems in the world market, a few people try to buy more rice than they usually do, and these two companies have decided they want all their customers to be able to purchase rice."
"What happened was one person bought a three-month supply instead of a two-week supply that they normally buy," Coia told AFP.
He predicted that pressure on the price of rice would ease by the end of next year, noting that more and more fields are being used to grow rice.
US rice production provides 88 percent of the domestic consumption while imports from countries such as Thailand and Vietnam make up the rest.
The rationing steps came as the price of rice has surged worldwide due to the rising costs of energy and fertilizers, droughts in some rice producing countries and higher demand.
Some countries have taken drastic steps such as limiting or suspending rice exports to ensure they meet domestic demand.
The price of certain types of rice rose by 50 percent in recent months, causing tension in the poorest parts of the world.
The high price of rice sparked violent protests in Haiti earlier this month, forcing the government to issue an order to lower prices. In the Philippines, the army distributed rice in impoverished neighborhoods to prevent tension.
The World Bank warned this month that the higher food prices could push 100 million people in poorer developing countries further into poverty.
Two major US retailers ration rice amid global food crisis - Yahoo! News
