Food costs have been soaring worldwide, spurred by increased demand in emerging markets like China and India; competition with biofuels; high oil prices and market speculation.
That situation has sparked food riots in several African countries, Indonesia, and Haiti. United Nations Secretary-General Ban Ki-moon has warned that higher food prices could hurt global growth and security.
But the effect of rising prices took a surprising turn this week– at least a surprising turn by U.S. standards — when it comes to sales of rice.
Rice prices in particular have surged this year as exporters curb supplies. Trade bans on rice have been put in place by India, the world’s second largest exporter in 2007, and Vietnam, the third biggest, in hopes of cooling domestic prices.
Worried that rice prices may soar beyond affordable levels and worried that shortages abroad would be replicated at home, U.S. shoppers began buying up large quantities of rice.
The move caused warehouse club operators Costco and Sam’s Club, which sell large bags of the staple item and have lots of small restaurant owners as their customers, to limits sales of rice.
Wal-Mart’s Sam’s Club warehouse chain said it was limiting sales of 20-pound (9 kg), bulk bags of Jasmine, Basmati, and long grain white rice to four bags per customer per visit, at all of its locations. It cited “recent supply and demand trends.”
Costco’s CEO Jim Sinegal said he thought the sudden surge in buying was being triggered by constant media reports highlighting food shortages and rising prices. He said the warehouse club was trying not to limits sales of the items.
“If it’s a Chinese restaurant who buys from us all the time we can’t tell them, ‘Why don’t you try french fries this week?” he said, “They need rice.”
If it does run out of supply, Sinegal said Costco is usually back in stock by the next day.
“We don’t want to create a panic situation,” he said.
Tell us … Have you been stocking up on certain items amid rising prices?
(Reuters photo and graphic)
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7 comments so far
I absolutely have. Not to crazy extents (I think), but at least somewhat. Certainly. How can you read about this and not think, if nothing else, that it’s better to buy rice now before the price goes up even further?
- Posted by Matt KAbsolutely! I have been following the Agflation series, and have been seeing this reported elsewhere. Although no one would listen to me for weeks, I decided to buy 1 big bag (just in case it got worse) I bought 1 20lb bag two weeks ago for 9.99, now it’s 15.21. Now the story has actually hit mainstream media, although they are still fluffing the clank out of it. I heard one field reporter on FOX say, “The food shortage will be good for the US because the US has free trade.” I just about popped an artery hearing that. Like it’s trade agreements that has anything to do with this! Starvation in most of the world is why the other countries have ceased exporting. Even the little chick from WFB (the one with the Auzzie accent) is telling US media, “No worries, mate, the US is fine!” Fine my behind! Take a look at all the scriptures that tell us of famine! that’ll get your heart pumping. No more rice and beans, no more rice ‘or’ chow mein! No more Rice cakes, Lindsay and Brit! awe, that’ll make more headlines than the world famine!
- Posted by JeremiahI am not. I have kept a running stash of rice and other commodities as counseled for the last decades by the Prophet (Amos 3:5) of the restored Gospel of Jesus Christ. We have known for a long time that “in the last days perilous times shall come”. The Lord has prepared His people. If we have listened to the counsel, we are prepared and shall not fear.
- Posted by Prept for the MessThis type of reporting instigates panic and in this case hording which will contribute to the growth of this problem. Greed, gluttony and waste have created the problems at hand. Greed, gluttony and waste will not make it go away nor will it make the situation improve. Conservation is key. Less is more. Simplicity is survival.
- Posted by Tina BIn Manhattan the per/sq-ft price to store a 20lb bag of rice dwarfs the cost of the rice whether $10 or $20.
- Posted by Nic FulconPeople are like sheep - one thinks it hears a lion and runs and the rest follow without knowing why. ALL commodities are being exploited by TRADERS, not supply and demand. Look at the gas pumps, check your recycle value on aluminum and copper, look at corn and wheat prices. These prices are all driven by traders who are not making money in the stock markets.
- Posted by JohnnyPeople panic buy and hoard in the US as everywhere else but they can hardly be blamed for this with constant media coverage of the very real global food crisis .
Money is tight in the US and other industrialised countries , this is often ignored , sure, we dont see food riots in Times Square but poorer people in the ‘first world ‘, and there are no shortage of them, are certainly feeling the pinch with the cost of their average weekly shopping basket up about %30 or more on last year.
There is also an increased reliance on protectionist policies by staple producing nations who want to damp down effects of price rises domestically for political reasons, again this is getting media coverage, so its probabably ‘rational’ for consumers to panic buy or hoard if they can afford to to maximise their income and avoid spiralling costs. Whether panic buying and hoarding help is another question but we certainly do have a global food crisis on our hands , it isnt simply a media creation and it foretells of even worse problems down the line when the global population hit 9 billion and rising. Its a wake up call.
- Posted by desik