Supply's fine, but U.S. shoppers snap up rice
— -- The run on rice in the USA that prompted warehouse clubs last week to limit purchases appears to be a reaction mainly to concerns about its rising price, rather than to a real shortage of the staple.
There's enough U.S. rice for now, but both domestic and international stocks are tightening.
"I don't believe that we're anywhere near any kind of shortage of rice for the domestic market," says Dwight Roberts, president and CEO of the US Rice Producers Association in Houston.
The Agriculture Department projects that U.S. farmers will plant 2.8 million acres of rice this year, up slightly from last year.
However, that's the second-smallest crop in nearly two decades, and carry-over stocks of rice are expected to decline sharply as U.S. exports rise to meet world demand. Worldwide, U.S. rice stocks have fallen by nearly 50% from record levels of 2001.
Exporters are hoarding rice and importers are building up their supplies even though, "USDA data suggest that the availability of rice is just as plentiful as it was the last two years," says economist Bruce Babcockat Iowa State University.
Roberts says the worldwide outlook is nerve-wracking. "When you have the lowest world stocks in (wheat and rice) since the '60s and the '70s and you add some population with that," he says, "you're headed for a train wreck sooner or later."
High food prices and shortages have led to riots in some impoverished parts of the world.
At Marina Food, an Asian supermarket in the Silicon Valley suburb of Cupertino, Calif., manager David Tsaisays that the wholesale price of jasmine rice from Thailand has suddenly shot up more than 50%. That's forced him to raise his retail price sharply to $22.99for 20-pound bags.
If the world's rice supply shrinks, many Asian stores and restaurants would have a rough time. Tsai's supply is adequate for now, and Marina's customers who like jasmine rice have switched to lower-priced rice from Japan and northern China.
"It's just like gasoline," Tsai says. "The prices go crazy, and customers cannot afford it."
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