By Marcus Kabel
Associated Press
Thursday, April 24, 2008

The two biggest U.S. warehouse retail chains are limiting how much rice customers can buy because of what Sam's Club, a division of Wal-Mart Stores, called yesterday "recent supply and demand trends."

The broader chain of Wal-Mart stores has no plans to limit food purchases, however.

The moves come as U.S. rice futures hit a record high on global food inflation, although one rice expert said the warehouse chains may be reacting more to stockpiling by restaurants and small stores than to shortages.

Sam's Club followed moves by Costco Wholesale, based in Seattle, which in some stores limited bulk rice purchases.

Sam's Club declined to say whether this was first time it had restricted sales of bulk foods. The limits affect 20-pound bags, not retail-sized ones. Costco chief executive Jim Sinegal declined to comment yesterday.

Sam's Club said it would limit customers to four bags at a time of imported jasmine, basmati and long-grain white rice.

The warehouse chain caters heavily to small businesses, including restaurants. Sam's Club spokeswoman Kristy Reed said she could not comment on whether the problem was caused by short supplies or by customers stocking up in anticipation of higher prices.

David Coia, USA Rice Federation spokesman, said there is no rice shortage in the United States.

"It's possible that small restaurants and bodega-type neighborhood stores may be purchasing rice in larger quantities than they do typically to avoid higher prices," Coia said about the warehouse chain restrictions.

BJ's Wholesale Club, a smaller chain based in Natick, Mass., said it is not imposing limits.

The Sam's Club restriction is effective immediately at all locations where quantity restrictions are allowed by law. It does not apply to other staples such as flour or oil.

"We are working with our suppliers to address this matter to ensure we are in stock, and we are asking for our members' cooperation and patience," Reed said in a statement.

Sam's Club has 593 stores compared with 2,523 Wal-Mart Supercenters that combine a grocery section with general merchandise.

Costco has 534 warehouses worldwide, most of them in the United States.

Wal-Mart spokeswoman Deisha Galberth said Wal-Mart stores have no plans for restrictions similar to those at Sam's Club.

"We are not seeing any signs of concern in the supply chain that would cause us to limit the sales of any items," Galberth said.

U.S. rice futures soared to an all-time high Wednesday as investors bet that surging world demand will continue to pressure already dwindling stockpiles. Rice for the most actively traded July contract jumped 62 cents, to $24.82 per 100 pounds on the Chicago Board of Trade, after earlier rising to a record $24.85.

Relentless demand from developing countries and poor crop yields have pushed rice prices up 70 percent this year, raising concerns of severe shortages of the staple consumed by almost half the world's population.

Brazil announced yesterday that it temporarily halted rice exports to ensure domestic supply as global prices rise.

The steep increases have followed similar jumps in the price of wheat, corn and soybeans that have added to Americans' rising grocery bills and led to violent food riots in poor countries including Haiti, Senegal and Pakistan.