Apr 24, 2008 8:22 am US/Eastern
Rice Prices Going Through Roof Worldwide
Cost Nearly Doubles Since February; Industry Experts: Part Of Problem Is China Ceasing Exports Due To Weak Dollar
NEW YORK (CBS) ―
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What you paid for a bag of rice in February, you are dishing out nearly twice as much now.
CBS
There's growing concern about a rice shortage. A recent rise in processing costs and increased demand have led to a shortage across the world.
Some have tried to stockpile, but there are growing fears some people could have difficulty feeding their families.
Bulk bags of food have been flying off shelves.
"A 50-pound bag of Jasmine rice … this has been the hot seller right now," Costco manager Stephanie Gordon said.
With rice a staple in the diet of many families, there's concern that stores will run out.
"At this time we're not going to engage in any limiting or whatever, but it's always a possibility," said Costco vice president John Eagan.
Those who do get their hands on a bag of rice may be dealing with sticker shock.
The price of a bag has nearly doubled in recent months. In February the cost was $9. Now it's up to $16. Industry analysts say the shortage can be attributed to a change in Chinese trade policy. The Chinese were once a main exporter of rice, but they stopped exporting when the American dollar got too weak for them to make a profit.
"This is a significant problem, not just here but especially in parts of the world where people are living on less than a dollar a day," said Scott Faber of the Grocery Manufacturer's Association.
And skyrocketing production costs aren't limited to rice growers these days. Since last year, flour has gone up 13 percent, milk 10 percent and eggs a staggering 30 percent.
"I remember when they used to be five for a dollar, I don't even know what they are any more, but I know they're not five for a dollar anymore," one shopper said.
Some experts blame the spike in grocery prices on the government fostering alternative uses for corn – a big part of the livestock diet.
"The biggest factor that Congress has under its control is the decision to make so much of our food into fuel and at a time when our food prices are rising so much it doesn't make much sense to do that," Faber said.
Due to the shortage, the Sam's Club warehouse store has limited its sales of Jasmine, Basmati and long grain rice. Costco has put a similar restriction on bulk sales of rice and flour.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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