Wal-Mart's Sam's Club limits rice purchases
Reuters
First Posted 08:08:00 04/24/2008
NEW YORK—Wal-Mart Stores Inc.'s Sam's Club warehouse division said on Wednesday it was limiting sales of several types of rice—the latest sign that fears of a rice shortage are rippling around the world.
Sam's Club, the No. 2 US warehouse club operator, said it was limiting sales of Jasmine, Basmati and long grain white rice "due to recent supply and demand trends."
US rice futures were hitting an all-time high Wednesday on worries about supply shortages.
On Tuesday, Costco Wholesale Corp., the largest US warehouse club operator, said it had seen increased demand for items like rice and flour as customers, worried about global food shortages and rising prices, stock up.
Sam's Club is limiting sales of the 20-pound (nine-kilogram), bulk bags of rice to four bags per customer per visit, and is working with suppliers to ensure the products remain in stock.
Warehouse clubs cater to individual shoppers as well as small businesses and restaurant owners looking to buy cheaper, bulk goods.
With prices for basic food items surging, customers have been going to the clubs to try to save money on bulk sizes of everything from pasta to cooking oil and rice.
Sam's Club said the large-sized bags of rice subject to the limits are typically purchased by its restaurant owner or food service customers.
Sam's Club said it was not limiting sales of flour or cooking oil at this time. Costco said some of its stores had put limits on sales of items such as rice and flour, but it was trying to modify those restrictions to meet customer demand.
Costco chief executive James Sinegal told Reuters that he believed the recent surge in demand was being driven by media reports about rising global demand and shortages of basic food items in some countries.
Food costs have soared worldwide, spurred by increased demand in emerging markets like China and India; competition with biofuels; high oil prices and market speculation.
The situation has sparked food riots in several African countries, Indonesia, and Haiti. United Nations Secretary-General Ban Ki-moon has warned that higher food prices could hurt global growth and security.
Rice prices have risen 68 percent since the start of 2008.
Trade bans on rice have been put in place by India, the world's second-largest exporter in 2007, and Vietnam, the third-biggest, in hopes of cooling domestic prices. Rice is a staple in most of Asia.
On Tuesday, Tim Johnson, president and chief executive of California Rice Commission, which represents growers and millers of rice in the state, said: "Bottom line, there is no rice shortage in the United States. We have supplies."
|
