Comments on: Global Food Crisis Hits Home As Retailers Begin To Ration Rice

By: Alecto

Alecto — Sun, 27 Apr 2008 00:45:10 +0000

“The gasoline market seems to respond to price changes much faster. A gas station will sell the gasoline in their underground tanks based on the current price of gasoline supplies rather than on the price they actually paid for the gas.”

Ummm, In NY that is illegal. Product currently on the shelves for sale, should be sold at that prince until the quantity made available is consumed. I have always wondered how the gas stations got away with this?

By: christopher wiwi

christopher wiwi — Fri, 25 Apr 2008 16:23:14 +0000

While we grow more and more corn for bio-fuel we are growing less and less Wheat, Rye and Oats, we need to grow less corn for bio- fuel and grow more non-food sources for bio-fuel.Also China has more and more people in the Industrial sector than it used to so therefore they are farming less and less and possibly the same with India.

By: moondancer

moondancer — Fri, 25 Apr 2008 16:03:21 +0000

There is no rice shortage in America. We use less than half of our annual crop. But the demand on these staples, dairy, and meat are pressuring prices.
There is a disconnect between global planning to feed our population, vanishing green fields, and infrastructure needed to keep and distribute food.
It’s easy to tsk tsk about famine in rural Africa, but will be a bit different when starving people take down cities and governments.
It is insane to convert fields to biofuels when they exacerbate the global warming and add pressure to the world food cost.
The cost to third world of the current policy is famine and death. To the developed world, is harm to the environment, added health care problems as diet degrades, inflation, and economic unrest.

By: wmhogg

wmhogg — Fri, 25 Apr 2008 16:03:16 +0000

Thank your for this explanation. I cynically thought that this was a ploy by Sam’s Club and Costco to create a “run” on their rice by exploiting rumors of shortages.

By: fletc3her

fletc3her — Fri, 25 Apr 2008 14:57:51 +0000

This is due to differences in the supply chain between wholesale restaurant supply and retail consumer supply. The wholesale chain is shorter and generally has lower costs. However, when prices skyrocket the wholesale chain tends to adjust to the new prices much faster. Thus, a restaurant buying rice wholesale has already seen the prices go up. However, Costco, which buys in huge lots is still selling rice based on the prices they paid several weeks or months ago. For a short period of time the rice at Costco might actually be cheaper than that which is now coming through the wholesale chain. But, as soon as Costco needs to secure new supplies the prices should normalize.

The gasoline market seems to respond to price changes much faster. A gas station will sell the gasoline in their underground tanks based on the current price of gasoline supplies rather than on the price they actually paid for the gas. Thus we see gasoline prices change day to day and the companies rake in record profit by selling their inventory at a much higher price than they paid for it.

I see all of this as a coming shockwave. Some economists have marveled that the high cost of gasoline has not been reflected in the cost of every day goods like groceries and other supplies. While the costs at the grocery store have been on the rise, they have not matched the meteoric rise in gas prices. However, I believe things are about to normalize. Egg, milk, rice, and wheat prices are all going up. As the new prices for these raw ingredients hit the bakers and manufacturers we are going to see the price of groceries go up across the board.