Some stores limiting sales of rice as customers hoard

By Associated Press

Wednesday, April 23, 2008

Wal-Mart Stores Inc.'s Sam's Club warehouse unit is restricting purchases of some types of rice to four bags a visit as prices reached a record in Chicago futures trading.

The limits on jasmine, basmati and long-grain white rice, a response to "recent supply and demand trends," will be put into effect in all U.S. stores where allowed by law and are effective immediately, Sam's Club spokeswoman Kristy Reed said Wednesday in an e-mailed statement.

Some consumers have started hoarding rice, the food staple for half the world as prices soar and supplies shrink. China, Vietnam, India and Egypt have curbed sales abroad to safeguard domestic supplies and cool inflation. Thailand also may restrict shipments, a World Bank official said.

"The warehouse clubs are doing it to protect their business customers, such as smaller restaurants, caterers, nursing homes, day-care centers," food consultant Jim Degen said.

"The business members are the most important members in warehouse clubs because they generate so much more revenue per member."

Supermarkets and grocery stores have a different customer base, and they haven't seen any signs of hoarding of rice by individual shoppers, said Bill Wertz, a spokesman for Wal- Mart, the second-largest grocery store retailer in Colorado.

Mary Lou Chapman, president of the Rocky Mountain Food Industry Association, said that none of her trade group's grocery store and convenience store members has reported rice shortages or concerns from shoppers. But she worries that consumers might nonetheless panic after hearing about reports of hoarding.

"My concern is when there's a national news story, it tends to drive a situation in local markets that wasn't there to begin with," Chapman said.

Some of Costco Wholesale Corp.'s stores, including locations in California, have put limits on sales of rice and flour, Chief Executive Officer James Sinegal told Reuters.