Spectre of food rationing hits US

by Priyo Australia | April 25, 2008 2:17 am

The spectre of food rationing arose in America today as retailers began imposing limits on rice and flour sales following bulk purchases by customers alarmed by rocketing global prices for staple foods.

Wal-Mart’s cash-and-carry division, Sam’s Club, announced that it would only sell a maximum of four bags of rice per person to prevent supplies from running short.

Its decision followed sporadic caps placed on purchases of rice and flour by certain store managers at a rival bulk chain, Costco, in parts of California.

The commodity cost of rice hit an all-time high on the Chicago Board of Trade this week and in some stores, retail prices have doubled over the course of a few weeks.

Retail experts said there was little evidence of "panic" hoarding by the public – but that restaurants and smaller retailers were buying up stocks at warehouse wholesalers in the expectation that the cost was heading even higher. Shops said Filippino residents in the US were also making large purchases to send to relatives in the Philippines, where a shortage of supplies is causing concern.

"What you’re seeing is people who buy in larger quantities, who have a restaurant or a corner store, stocking up because of media reports that prices could go higher," said Dave Heylen, a spokesman for the Californian Grocers’ Association.

Since the beginning of the year, rice producing countries including China, India, Vietnam and Egypt have imposed limits on exports in order to keep prices down at home. This week, a top World Bank official predicted that Thailand, the world’s largest rice exporter, might follow in restricting shipments.

Restrictions at Sam’s Club, which has 580 warehouse stores across the US, apply to Jasmine, Basmati and long grain white rices – the type typically used for dishes such as curry. The chain said the limits were "due to recent supply and demand trends".

At Costco, chief executive James Sinegal said only very large purchases would face sanctions: "If a customer came in and said ‘I want 10 pallets of flour’, we’d probably say, ‘No we can’t give you that. We can give you one pallet.’"

The owner of one restaurant in Oakland told a local television station that the price of a typical sack of rice had risen from $20 to $40 in a matter of weeks. Son Tran of the Le Cheval Vietnamese restaurant said his stockpiles were dwindling – and that the price of some vegetables had also risen by as much as 50%.

Industry leaders sought to calm fears. Tim Johnson, chief executive of the California Rice Commission, said there was no prospect of an overall shortage of food – and that stores’ supplies were quickly being replenished.

"The reality is, at least for the next several years, we’ve seen a new level for what food costs are going to be in the US and probably internationally, too," said Johnson, who added that a typical serving of rice cost less than 10 cents. "It’s still the best deal on your plate."

Andrew Clark in New York guardian.co.uk, Wednesday April 23 2008 | Link posted by Kamrul Ahsan Khan

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