Rice futures hit an all-time high on US commodities markets on Wednesday, raising fears that market speculation is adding upward pressure to food prices already suffering from rising demand, drought and diversion of crops to biofuels. The record high comes the same week as Sam’s Club and Costco, two large membership-based supermarket chains, took the almost unheard-of step of limiting the amount of rice they are willing to sell to a single customer.
Story Transcript
VOICEOVER: The two biggest US warehouse retail chains are limiting how much rice customers can buy because of what Sam’s Club called “recent supply and demand trends.” The move comes as US rice futures hit a record high amid global food inflation. Sam’s Club followed Seattle-based Costco, which put limits in at least some stores on bulk rice purchases.
JIM SINEGAL, PRESIDENT, CEO, COSTCO COMPANIES, INC: We don’t want to create a panic where we don’t think there is a panic. If we weren’t able to get any more rice or any more flour, that would be a different story; but we’re able to continue to replenish our supplies.
VOICEOVER: A Sam’s Club spokeswoman could not say whether the problem was caused by short supplies or by customers stocking up in anticipation of higher prices.
LESTER BROWN, EARTH POLICY INSTITUTE: This is not very common. I mean, I have to go back to my memories of World War II to remember rationing in any serious way.
VOICEOVER: At a food bank in New York City, rising prices are contributing to empty shelves and people being turned away.
TYRONE HARRYSINGH, C.O.O., FOOD BANK FOR NEW YORK CITY: They’re facing angry people on the line.
VOICEOVER: Investors in the commodities market are betting that surging world demand will continue to pressure already dwindling stockpiles. Rising food prices have been blamed on increasing demand, droughts, and the diversion of food crops to biofuel production. But many analysts are now pointing to speculation on commodity markets as an important factor in growing food prices. Rice prices have gone up 70 percent so far this year, raising fears of severe shortages of a staple food consumed by almost half the world’s population.
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