Grain pain: Rationing in US as rice gets pricey

WASHINGTON: Some outlets have begun rationing rice, the price of wheat flour has gone through the roof, there's no butter on store shelves, and gas at the pump is at an all-time high. The usual developing country woes from Asia, Africa, and Latin America? Try again. These are stories from the United States and Japan, the world's most advanced nations that bespeak prosperity and plenitude. Astonishing accounts of panic buying and rationing are surfacing from Tokyo to New York as world leaders are breaking out in cold sweat over tightening food supply chain. On Wednesday, two of America's largest warehouse chains -- Wal-Mart's Sam's Club and rival Costco --imposed limits on purchase of rice, citing panic buying amid tightening supplies and rising prices. Some Indian and Asian grocery stores also reported a run on rice as the perceived worldwide food shortage continued to make headlines, fed by the 24-hour news cycle. Meanwhile, Japan, one of the world largest food importers, announced that it had exhausted its annual grain budget with two months remaining even as the country ran out of butter -- both as a consequence of rising prices and shortage of supply from countries such as Kazakhstan and Australia. Assurances by US producers and grain analysts that there was enough cereal in the pipeline did little to arrest the panic in a country where forecast of a few inches of snow is enough to clear out the supermarket shelves. The tabloid New York Post story on the subject was headlined: Pain, No Grain. Ironically, amid all this vexation, it was news from India that calmed the markets a bit. The announcement from New Delhi that India would produce a bounteous harvest of wheat (and rice) this coming summer beat back wheat prices to a six-month low in the US market. With the US acreage under wheat also improving under good weather conditions, the International Grains Council has forecast a seven per cent increase in global wheat production. India is now the world's second largest producer of both wheat and rice, and but for its appalling storage and distribution systems that wastes more than ten per cent of its harvest, it is in a position not only to feed itself but also help other countries. In an interview to the Times of India earlier this week, Nobel laureate Dr Normal Borlaug, father of India's Green revolution, said there was still plenty of upside to food production in India and there was no need for panic. "The only thing that has held back higher grain production is complacency. New techniques and technology is available to increase food production," Dr Borlaug said. But that will take some time to kick in. For now though, it is panic stations from Tokyo to San Francisco, not to speak of Philippines to Haiti, where there have been reports of foot riots going beyond hoarding and rationing. In fact, it is India's restriction on export of all rice, except for basmati, that is being blamed in part for the rice stampede. Other major rice producing countries such as China, Thailand, and Vietnam have also banned exports as they seek to first meet local demand. Similar action has followed among major wheat producing nations such as Ukraine and Kazakhstan. The consequences of the developing world's mantra of feed-your-own-first has not been happy for the US, which has diverted some of its grain to bio-fuels, and Japan, which is the world's biggest net food importer. On Wednesday, Tokyo announced that it will ask the World Trade Organization as early as next week to introduce rules to prevent countries from restricting exports of wheat, rice and other grains. Whether the move is a recipe for a new food fight in the international arena amid what appears to be needless panic is something that will unravel over the next few weeks.