Rice Prices Hit High, Purchases Restricted on Imported Varieties

JONESBORO, AR (KAIT) -- Supply and demand is determining just how much rice shoppers can buy in Region 8. Sam's Club announced limited purchases of its jasmine, basmati and long grain rices, it's the latest sign that fears of a rice shortage are rippling around the world.

The warehouse retailer is limiting the sales of 20-pound, bulk bags of rice and right now customers can only buy four bags per visit.  Even though these are imported rices, Region 8 rice farmers could see an impact.

The United States produces less than 2% of the world's supply of rice, domestically consuming only about 6% of its total crop.  Arkansas is a leading state in production; U.S. futures soared to an all time high earlier this week.

"We've got all time high prices, but we've also got all time high costs. Everything we are buying is double what it was last year, in some cases triple," said Craighead County Farm Bureau President David Hodges.

Most of the rice eaten in the world is consumed within 60 miles of where it is grown, but as populations crossed borders, the taste for specialty rices spread, allowing for retailers like Sam's Club to become part of the global market.

"Some countries, there's a fear that they will actually hoard rice to make sure that their population has enough food, some countries have export bans traditionally that export a lot of rice and there is a concern until their crops come off," said Craighead County Extension Agent Steve Culp.

Experts believe world rice supplies are adequate, but extremely tight.  Demands from developing countries and poor crop yields have pushed prices up by 70%.

"Nobody is going to have a problem buying rice here in Arkansas and the United States, but like everything, rice is a global commodity," said Culp, "And the prices have traded up and they are higher then I can remember but the old saying, the cure for high prices is high prices and at some point in time, this will be alleviated."

The Costco Warehouse Corporation is also restricting how much imported rice customers are able to buy.  However, Wal-Mart stores say they have no plans to limit food purchases.

May rice traded at $24.20 Thursday on the futures market at the Chicago Board of Trade.