Two Biggest U.S. Retailers Limit Rice Purchase

Sam`s Club, one of the two biggest U.S. warehouse retail chains, is limiting the amount of rice a customer can buy because of what it called “recent supply and demand trends.”

Stella Kim, 45, a Korean-American living in Washington, D.C., was bewildered on Wednesday when she saw at the retail chain a notice informing rice purchase restriction. An employee of Sam’s Club said, “Customers are limited to buy up to four 20-pound bags at a time.”

She said, “Although I had no intention to buy that much of rice, I found myself embarrassed at the thought that the United States is no longer a safe haven from the food crisis in the third world.”

Amid rising food prices in the global market, the two biggest U.S. warehouse retail chains started to limit rice purchases.

Sam`s Club, a division of Wal-Mart Stores Inc., and Costco Wholesale Corp. announced on Wednesday that they will put restriction in some stores on bulk rice purchases from that day.

A spokesman of a smaller chain, BJ’s Wholesale Club Inc., said, “At the present time, BJ’s Wholesale Club is not limiting the amount of rice purchases made by our members, but, due to the current market situation, that could change at any time.”

In fact, there are no signs of rice supply shortage in the United States. The warehouse retailers’ measure may be reacting to prevent smaller businesses, including restaurants, from hoarding rice amid a fear of global food inflation.

Costco President and CEO James Sinegal said in an interview with Reuters, “The sales of rice and flour surged for the past ten days and inventory stock shortage was reported in some stores. But we have enough supply to meet the demand for now.”

“There may be some restaurant owners purchasing heavy volumes of rice for the fear of rising rice prices. In general, however, we haven’t seen any signs of supply shortage,” said a spokesman of the U.S. Rice Producers Association.

The global rice prices went up by 68 percent this year alone, and some U.S. retailers reported more than a double increase in rice prices for the past few weeks.

The primary reason for the current soaring rice prices around the world lies in the demand increase in China and India. In addition, major rice exporters, such as China, India, Vietnam and Egypt, are placing export bans on rice in an effort to meet their domestic rice consumption. Thailand is also expected to follow suit.

In Haiti, six people died when hunger riots erupted this month alone, and a new wave of boat people is heading for the United States.

Meanwhile, Venezuela, Cuba, Bolivia and Nicaragua Wednesday signed a food security fund with an initial $100 million as part of the joint cooperation to deal with food price inflation, the AP reported.

The four leftist leaders, including Venezuela’s President Hugo Chavez, announced in the summit talks held in Caracas that they agreed to create a food security fund and pursue joint programs for agricultural development.

"This food crisis is the biggest demonstration of the historic failure of the capitalist model," Chavez said. He added, “The countries need to create a distribution network, so we don’t fall into the hands of intermediaries and speculators, which stop millions from receiving food."

The director general of the United Nations Food and Agriculture Organization (FAO), Jacques Diouf, pointed out in an interview with Reuters that, "The situation we are in is the result of inappropriate policies over the past 20 years. Between 1990 and 2000 we lowered food aid for agriculture by half."