Business

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High Rice Prices Hit the U.S.

April 25, 2008 11:30 AM
by findingDulcinea Staff
U.S. consumers are stocking up on rice as warehouse chains such as Sam’s Club ration sales. High global prices have prompted riots in some countries.

30-Second Summary

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A consumer “panic” has hit California, with shoppers buying up large quantities of rice from Asian supermarkets after hearing about food riots and export freezes in Asia, reports McClatchy Newspapers.

“When people saw the price jump $2 or $3, they started buying like crazy—10 bags, 15 bags," said Cu Van, a floor manager at Goldstar Supermarket.

The international price of rice has risen about 68 percent since the beginning of the year, and rough rice for July delivery reached $24.745 per 100 pounds for the first time, reports the BBC.

High fuel costs, bad weather and land allocation favoring biofuel crops are blamed for the supply problems. Asian countries such as India and Vietnam are reducing exports in order to protect domestic supplies, and there are signs that Thailand may take similar measures.

The rise in rice prices is just the latest of the world’s major food commodities to experience a hike in prices. Others include wheat, corn, soy and dairy products.

Sam’s Club
, a Wal-Mart Stores Inc. warehouse unit, is limiting customers to four bags of jasmine, basmati or long-grain white rice per visit in all U.S. stores, and competitor Costco is said to be considering restrictions as well.

Alyce Lomax at The Motley Fool points out that it is only the 20-pound bags of rice that are being rationed by stores.

“The problem is not quite as dire as it sounds, even if it does carry global implications,” Lomax said. “And you don’t need to start wondering how hard it would be to start up a backyard rice paddy.”

Headline Link: ‘Panic Over Rice Prices Hits California’

Related Topics: Rice riots in Haiti and Thailand exports less rice

Reaction: Costco restricts purchases

Background: Rising food prices foreshadow global shortages

Opinion & Analysis: ‘Your Next Four-Bagger: Rice’

Reference: The cost of food

Video: The International Rice Research Institute

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