Rice hits record as Wal-Mart curbs sales
Updated: 2008-04-25 07:54
Rice advanced above $25 for the first time as Wal-Mart Stores Inc's Sam's Club warehouse unit restricted purchases of some types of rice in the United States.
 A shopper inspects the price of rice at a Tesco store in Bangkok, Thailand. [Agencies] |
The cereal, the staple food for half the world, has more than doubled in the past year as nations curb exports to safeguard domestic supplies. Sam's Club limited customers to four bags of jasmine, basmati and long-grain white rice per visit in all US stores where allowed by law, company spokeswoman Kristy Reed said.
Consumers have started hoarding rice as supplies shrink. Thailand, which ships one-third of the world's exports, may restrict sales, a World Bank official said this week. Wheat, corn and soybeans gained to records this year, spurring social unrest in countries including Haiti and Egypt.
"We have been neglecting our basic rice production infrastructure and research and development for 15 years," said Robert Zeigler, director-general of the International Rice Research Institute in the Philippines. "National hoarding really doesn't help the market," he said.
Rice rose as much as 0.9 percent to $25.01 per 100 pounds in Chicago yesterday and has climbed 26 percent this month, heading for its biggest monthly gain since October 1993.
The US warehouse clubs are trying to protect business customers, like smaller restaurants, caterers, nursing homes and day-care centers, said Jim Degen, principal of J.M. Degen & Co, a food industry advisory firm based in Templeton, California.
UN Secretary-General Ban Ki-moon said on Sunday rising food costs may hurt economic growth and threaten political security. The World Bank has forecast that 33 nations from Mexico to Yemen may face social unrest because of higher food and energy costs.
Brazil Curbs
Brazil may curb exports of rice to build domestic inventories, Agriculture Minister Reinhold Stephanes said in Brasilia on Wednesday. The government is seeking an agreement with producers to ensure the country has enough rice.
Japan, the world's biggest net food importer, will ask the World Trade Organization as early as next week to introduce rules to stop countries restricting grain exports, Hiroaki Kojima, deputy director for international economic affairs at Japan's Agriculture Ministry, said on Tuesday.
Persuading the WTO to intervene may be tough for Japan, which protects its agriculture with subsidies and import tariffs as high as 700 percent on farm products. Developing nations are pressing Japan to cut the duties and open its market in the Doha Round of trade talks.
Import Delay
Japan, which is self-sufficient in rice, will delay seeking imports of the grain required under a WTO agreement until international prices stabilize, a government official said in an interview in Tokyo. The country imported 630,550 tons of rice in the year ended March 31, part of a WTO agreement to seek 770,000 tons.
Thailand may follow its Asian neighbors in limiting sales, James Adams, vice-president of the bank's East Asia and Pacific department, said on Monday. The country's Prime Minister Samak Sundaravej said on Tuesday his country won't impose curbs on overseas exports or distort prices.
Still, there are signs that record prices are encouraging farmers in Asia to increase production.
The Philippines, the world's biggest rice importer, may reduce the volume it's seeking to buy at a tender next month, after production exceeded target, Agriculture Secretary Arthur Yap said yesterday.
The country planned to buy 500,000 metric tons of rice on May 5. The Southeast Asian nation has already produced 6.9 million tons of rough rice so far this year, Yap said. That is 200,000 tons more than the target for the first half.
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