Shops Ration Sales of Rice as US Buyers Panic

The global food crisis reached the United States yesterday as big retailers began to ration sales of rice in response to bulk purchases by customers alarmed by rocketing prices of staples.

Wal-Mart's cash and carry division, Sam's Club, announced it would 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 some store managers at a rival bulk chain, Costco, in parts of California.

The world price of rice has risen 68% since the start of 2008, but in some US shops the price has doubled in 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 wholesalers in the expectation that the cost would go even higher. Shops said Filipino 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 California Grocers Association.

The price of staple foods has been rising at an accelerating rate across the world, driven by what the United Nations has called a "perfect storm" of rising demand from developing countries such as China and India, the impact of climate change and policy responses by governments.

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

The EU trade commissioner, Peter Mandelson, yesterday called on the World Trade Organisation to put pressure on food-producing countries to maintain exports. "If we restrict trade, we're simply going to add food scarcity to the already large problems of food shortages that exist in different countries," he told Reuters news agency.

The director of the UN's Food and Agriculture Organisation, Jacques Diouf, said the crisis had been building for decades. "The situation we are in is the result of inappropriate policies over the past 20 years," Diouf told journalists in Paris, pointing to a halving of aid to agriculture in developing countries between 1990 and 2000, while the industrialised world maintained generous farm subsidies.

British officials say they hope the food price shock will provide impetus for a long-delayed deal on liberalising world trade, known as the Doha round. They predict a possible breakthrough in the next few weeks. They also point out that the price rise could bring much-needed income to rural areas in Africa and elsewhere in the developing world if farmers are given enough support to respond.

Diouf said: "This is not Greek tragedy where fate is decided by the gods and humans can do nothing about it. No, we have the ability to influence our futures."

In Venezuela, President Hugo Chavez yesterday announced a $100m "food security fund", at a regional summit to agree policy as the crisis spreads instability across Latin America and the Caribbean.

Looting and riots in Haiti left at least six dead and forced the resignation of the prime minister this month, leaving the hemisphere's poorest country tense and edgy. In Guyana an 80% rise in the price of rice and 50% in the cost of chicken triggered protests and a strike by sugarcane workers. The government promised to issue seeds and urged people to cultivate idle land. Surinam set up an emergency cabinet committee to seek ways to dampen food prices.

(c) 2008 The Guardian