Rice Fever - Shortages and Skyrocketing Prices

Next time you throw away leftover rice, think twice. Rice prices have gone up all over the world and billions of people are looking at hoarding it. In North Carolina last week, some locals and I spent a good deal of time about a news story on rice being sold in controlled quantities. 

Reuter's and the Financial Times reported that Walmart/Sam's Club and Costco were restricting bulk rice purchases because many customers were fearful of rising food prices world wide.  (It's been estimated that prices have gone up about 30%.) That news was reported in Australia and the U.K.

In Vietnam, inflation this year is 16% (it never went down after Tet, as is the usual). Just a few days ago, rice prices in Vietnam went up precipitously (nearly 100% in one instance), within hours as reported in this Thanh Nien news story that Simon Bao pointed me to. Cash is tight in Vietnam, and people are panicking, as reported yesterday in the Globe and Mail. Vietnam is one of the leading world exporters of rice and people are scared, while others, perhaps are speculating and taking advantage of fearful consumers in Vietnam and abroad.

What kind of rice are we talking? Jasmine, Basmati and long-grain -- the favorites for many of us oryza sativa eaters. Not the stuff for risotto.

Costco Chief Executive Officer James Sinegal speculated that there was overreaction due to media hype, but my husband and I were thinking of switching to buying a 50-pound bag instead of our usual 25-pound bag of jasmine rice next time we're at the Asian market.  The stuff doesn't go bad quickly . . .

I don't know if this is universally human or just an Asian proclivity to hoarding or an attribute of people who've been through hard times. My father vividly recalls the northern Vietnam famine in the late 1940s when there was not enough transportation to deliver rice from the south to the north. Thousands, if not hundreds of thousands of people, died within months.

Ours is a hungry planet and world population is not shrinking. Are any of you stocking up on rice?

Comments

[Al]

I was concerned and went to my nearest Chinese grocery for rice last week. If anything, they had more rice than usual.

I got 10 pounds, a lot for me. I don't remember the price, or know if it was higher than the last time I bought it.

Al

[Lili]

I'm not stockpiling it, but the rest of my siblings appear to be. And given the price that I paid for a 25lb bag of rice ($25, insane since it was only $14 a few months ago), I think I'm going to be stockpiling it too. They total ran out at Costco. I'm not worried about a shortage, more the price, $1/lb. Egads!

[Al]

There may be a real crisis, but people are "playing games", too.

[Jeff D]

Andrea, I think perhaps you are fueling things by calling this a shortage. By all reports, there is not any shortage at all. Thailand has come out and said that currently planted crops are expected to meet or exceed predictions and Thailand has a lot of unplanted land that could be cultivated if necessary.

This is panic buying for absolutely no reason. There isn't a shortage of rice.

[Nate 2.0]

I'm not stockpiling but we are eating less rice these days.

[anh]

Lots of the older generation viet folks in the community are stock piling even at these ridiculous prices. They cannot ignore what the see on the news and are buying out of fear, which in turn has artifically raised prices in the viet markets due to the increased demand. It's really a vicious cycle. For us, we've just switched to a medium grain rice that is sold in other asian markets. It's stickier and has a closer consistency to gao nep which we love so this substitute has worked out quite well for us. And at $8.99 for a 20 pound bag, the thirfty asian girl in me can't resist!

My MIL just came back from VN and from her account,rice prices were going up by at least a 1000 dong each day in her small village. The most affected were the poor who could barely make enough money to go to the market and buy rice daily. To that end, the government had put out decrees to enforce set prices to limit the price gouging that was happening. Not sure if that is working or not, but for the sake of the poor I hope the madness will end soon.

[Binh]

Say what you will, but I'm not taking any chances with not having rice. Shortage or not, when the shelves are empty, I don't want to be kicking myself for not hoarding!

[Ms. Jen]

Given that my preferred daily rice is brown short grain, I don't think I will have any competition at the store. ;o)

[Andrea Nguyen]

Well, we've oddly gotten into eating brown rice in the last year and it's not bad at all, especially if you toast the grains before cooking them. There have been reports on a world food shortage for months that has resulted from increasing wealth and population. Whether there is a shortage or not, I think it's important to gauge our individual reactions to it. Granted, many of us are not going to go hungry in developing countries, but our visceral reactions to rationing is telling of our reliance on rice as a staple grain.

Many of us are fortunate to live in relative economic comfort so that if rice were to increase a few dollars for 25 pounds, we can actually absorb that rise. Anh is right though, for those who are poor and who's diet is mainly rice, they may suffer the most -- whether at the hands of a shortage or speculators who will end up taking advantage of the situation.

[Simon Bao]

Actually I think it is quite fair and accurate to talk about the rice shortages, as long as one knows what that means.

There are already rice shortages in countries in Asia and Africa, now parts of South America from what I heard. It's not the result of some blight that has destroyed global harvests though. It's the result of steadily increasing global demand, matched with steeply rising prices for rice (and all grains). Cost of benchmark rice on the global market has risen 300% in just a few months. Absolutely that produces shortages, in every place that can't afford it.

Plus, to some still vague extent, production and supplies have been altered by the redirection of some croplands to energy production, rather than grain production.

Nations that export rice to others have announced that they'll severely reduce those exports - or stop exporting altogether - in order to hold down prices in their own domestic markets, for their own citizens.

Now there's talk of an international Rice Cartel forming. Thailand, Vietnam, Cambodia, Myanmar/Burma, and Laos. The big producers of rice for exporter. To seek to institutionalize, manage, and profit from the high prices/short supplies.

To be frank, cheap affordable rice keeps lots of despotic regimes in power. Scarce, high-priced rice threatens them all. Naturally the regimes cut exports if that's going to limit price rises and keep them in power. Offered a choice between an Olympics free of protests and demonstrations, or cheap abundant rice, the Beijing regime will choose cheap rice.

What appears to have happened in the US is that some buyers saw the forecasts for where rice prices will soon be, and began buying it up now, in bulk. Which inspired others to do the same. Which led to some shortages in some giant retailers, then limits on purchases, then some people misunderstanding what's going on and panic purchasing... Once there were runs on banks, now there are runs on graineries and Costcos.

[Simon Bao]

Andrea, today's NY Times has a little article, continuing this story... how a bit of anxious bulk purchasing causes some short-term shortages. And then more anxious bulk purchasing...

A Run on Rice in Asian Communities
http://www.nytimes.com/pages/dining/index.html

[Sarah Rojers]

I am lucky living in the UK where there is plenty of rice although I have noticed a rise in prices very recently. It is a shame as I cook with rice almost 5 times a week.

Sarah

[Andrea Nguyen]

Simon, Thanks for the NYT piece, which covers the rice-hungry shoppers in San Fran's Chinatown.

My own mom reported that she went to Costco and bought her allotment of Blue Ribbon long-grain and basmati, which aren't her regular choice grains. But with a 50-pound total purchase, she and Dad will be eating that stuff for a lonnnnnng time.

BusinessWeek (May 12, 2008) reported that the rice shortage is artificial because India and Vietnam (the world's number 2 and 3 rice exporters) decided to increase the amount of rice held back for domestic consumption in order to protect their population from skyrocketing food costs -- a worldwide problem these days.

In 2007, Vietnam, Thailand and India recorded record harvests. But they're just keep more of it for themselves. The result is less for the rest of us.

[Ivy]

I've been wondering about this for a while, but does anyone know how long you can keep the rice? I was given 50 lbs. jasmine rice 5 years ago and I still have half of it left because I mix it with brown rice and I also eat Basmati rice. My Dad said the rice will lose its nutritional value if kept too long.

If people are hoarding rice, then it wouldn't be good anymore after a while right?

[Amy]

Oi! To me, this whole rice deal is more of a crisis than anything! My family have always purchased 50 lb bags of rice for about 21 dollars. Now it's risen to 35-38 dollars... IN ONE WEEK. In answer to Andrea's question about storing rice over an extended period of time, I believe rice will last a good period of time because it lacks oils and moisture. According to this link:

http://standeyo.com/News_Files/Food/Extend_Shelf_Life.html

rice can last about 8-10 years, so long as it's airtight and in held at a cool temperature.

And I also recall throughout history, hoarding and storing grains for extended period of time was quite common, particularly during times of strife and famine. It was still good to eat afterwards (although I'm skeptical to how it will smell).

On another note, my parents-in-law just came back from Cambodia and Thailand and much like what Andrea said, the land commonly used for rice paddies are used for growing other things. In Cambodia, they are ridding large expanses of rice paddies to erect shoe and clothing factories. And through all this, the poor people in Southeast Asia are starving because they can't afford to buy rice. I feel so bad because if I am struggling here in America (and I really am), imagine how hungry poor people are in these third world areas. My heart reaches out for them and I waste not one morsel of food.

[Bao Thuy]

I decided to buy only one 50-lb bag late last year when the new 2008 crop was first available (I usually get 2 bags for the year), because the price had gone up about $5. Now prices have doubled in the Mpls. area, and I'm surprised that so many people are hoarding even at these ridiculous prices. I bought only one more bag recently for $34, and am hoping to ride this out and that prices will fall by the time I finish this bag. I also needed some sushi rice, and had heard that short-grain rice was not affected, so I didn't rush out to buy any when I first ran out. To my dismay, when I went shopping this past weekend, those prices have also doubled (I think people are starting to use that as a substitute for jasmine rice).
Thank you, Andrea, for making this forum available. It was interesting to read about this phenomenon from an Asian foodie's perspective, and to hear about what's happening around the country from your loyal readers. I had read some articles on other news websites, but they were always too vague about how it's affecting various populations both within the US and abroad.

We no longer have to use superstitions to get our kids to finish their rice (my mom always used that on me). Now we have a real reason to not waste a single grain!

[Andrea Nguyen]

Bao Thuy, welcome!

Today I went to the Chinese market in San Jose and we bought a 25-pound bag for $22 dollars. Now that's still less expensive than prices at specialty grocers for rice. Yes, the price has gone up about 80% but it's still pretty affordable food, given that a little goes such a long way. Make chao (creamy rice soup/porridge) with it and you could stretch 1 pound for weeks!

When I was leaving two young Asian American guys came in pushing a shopping cart with about 5 50-pound bags of rice. They wanted to return it. Guess they must have changed their minds. I have a feeling their parents may have sent them to do it. They were a bit sheepish about it.

The average American spends about 5.6% of his/her budget on food. In the U.K. it's about 8.7% and in other countries more like 10%. I don't mind paying more for good quality products like rice. We drop serious money on good baguette and olive oil, no? Why not rice? It may help people on the other side of the planet too by making their lives a little easier.