US consumers show unprecedented demand for rice, flour stocks
Concern over how quickly current world supplies are being drawn down has given commodity speculators all the ammunition they need to drive the price of rice through the roof. The price of rice from Thailand has nearly tripled since the beginning of the year and stands at record highs. Rice prices on the Chicago Board of Trade are up about 80 percent this year. While U.S. government and trade group officials have maintained that there is no shortage on the horizon, buyers have been streaming into warehouse clubs to buy rice in bulk.
USA Rice Federation spokesperson David Coia offered an explanation to The Associated Press. “It’s possible that small restaurants and grocers may be purchasing rice in larger quantities than they do typically to avoid higher prices,” he said.
Having seen this bulk rice buying activity take place, both Wal-Mart’s “Sam’s Club” and Costco have stepped in to put a limit on bulk rice purchases. With Costco also enforcing a rationing policy on flour purchases following rises in sales due to the wheat price increases. Sam’s, which is limiting the sale of 20-pound bags of jasmine, basmati and long grain white rice to four per shopping trip, said it took the action to prevent large distributors from depleting its stock.
“We believe limiting rice purchases to four bags per visit is consistent with the needs of the majority of our members, including many restaurants,” Sam’s Club spokesperson Susan Koehler told Reuters in an email.
Sam’s Club and Costco are America’s two largest warehouses and they have been forced to try and get their suppliers to provide a lot more rice and flour stocks than usual. The fear in the US is unwarranted as stockpiles are not low and the panic purchasing will only serve to worsen the global crisis, with stocks falling and prices consequently rising. If concerns continue to mount it may not be long before Australia is subject to similar examples of panic purchases.