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Wal-Mart Rations Rice, this is out of control...

  1. WTF is going on, this is just getting out of control, I could just imagine what is next....looks like sushi prices are going to go through the roof just like pizza and bread did after wheat jumped.....




    Wednesday, Apr. 23 2008
    Wal-Mart Rations Rice, Warns of "Supply and Demand" Concerns



    Wal-Mart, the world’s largest retailer, said on Wednesday that it would ration the amount of rice each customer can purchase because of recent “supply and demand trends.”

    “We are limiting the sale of Jasmine, Basmati and Long Grain White Rices to four bags per member visit,” the company said in a statement. “This is effective immediately in all of our U.S. clubs, where quantity restrictions are allowed by law.”

    Wal-Mart (WMT: 57.15, +0.60, +1.06%) is the first major grocer to limit the purchasing of a commodity because of the recent run up in prices. The company said it is not limiting the purchase of other basic food products like flour or oil.

    The price of rice, which is the primary foodstuff for the majority of the human population around the world, rose to $894 a metric ton according to the Thai Rice Exporters Association. That’s compared to the $327.25 a ton average price in the same month last year.

    In Chicago, the price of export-quality rice rose to $24.745 per 100 pounds on Tuesday.

    The run up in price in rice is primarily related to poor harvests and countries curbing exports. Thailand, Asia’s largest exporter of rice, said it may curb exports.

    The World Food Program called the recent run up in prices of rice and other basic commodities a “silent famine.”

    Wal-Mart did not say when the rationing would end, but it was “working with our suppliers to address this matter to ensure we are in stock, and we are asking for our members' cooperation and patience.”
     
  2. Do you have a link? This is insane. I need to send this article to a lot of people I know.
     
  3. You might want to send them this one too........

    http://www.nytimes.com/2008/04/06/fashion/06survival.html

    Duck and Cover: It’s the New Survivalism
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    By ALEX WILLIAMS
    Published: April 6, 2008
    THE traditional face of survivalism is that of a shaggy loner in camouflage, holed up in a cabin in the wilderness and surrounded by cases of canned goods and ammunition.

    DUGOUT A father and daughter enter a Cold War bomb shelter.

    ALIVE AND ALONE Will Smith stars in “I Am Legend” as a survivor of a man-made virus, walking New York’s desolate streets.
    It is not that of Barton M. Biggs, the former chief global strategist at Morgan Stanley. Yet in Mr. Biggs’s new book, “Wealth, War and Wisdom,” he says people should “assume the possibility of a breakdown of the civilized infrastructure.”

    “Your safe haven must be self-sufficient and capable of growing some kind of food,” Mr. Biggs writes. “It should be well-stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc. Think Swiss Family Robinson. Even in America and Europe there could be moments of riot and rebellion when law and order temporarily completely breaks down.”

    Survivalism, it seems, is not just for survivalists anymore.

    Faced with a confluence of diverse threats — a tanking economy, a housing crisis, looming environmental disasters, and a sharp spike in oil prices — people who do not consider themselves extremists are starting to discuss doomsday measures once associated with the social fringes.

    They stockpile or grow food in case of a supply breakdown, or buy precious metals in case of economic collapse. Some try to take their houses off the electricity grid, or plan safe houses far away. The point is not to drop out of society, but to be prepared in case the future turns out like something out of “An Inconvenient Truth,” if not “Mad Max.”

    “I’m not a gun-nut, camo-wearing skinhead. I don’t even hunt or fish,” said Bill Marcom, 53, a construction executive in Dallas.

    Still, motivated by a belief that the credit crunch and a bursting housing bubble might spark widespread economic chaos — “the Greater Depression,” as he put it — Mr. Marcom began to take measures to prepare for the unknown over the last few years: buying old silver coins to use as currency; buying G.P.S. units, a satellite telephone and a hydroponic kit; and building a simple cabin in a remote West Texas desert.

    “If all these planets line up and things do get really bad,” Mr. Marcom said, “those who have not prepared will be trapped in the city with thousands of other people needing food and propane and everything else.”

    Interest in survivalism — in either its traditional hard-core version or a middle-class “lite” variation — functions as a leading economic indicator of social anxiety, preparedness experts said: It spikes at times of peril real (the post-Sept. 11 period) or imagined (the chaos that was supposed to follow the so-called Y2K computer bug in 2000).

    At times, a degree of paranoia is officially sanctioned. In the 1950s, civil defense authorities encouraged people to build personal bomb shelters because of the nuclear threat. In 2003, the Department of Homeland Security encouraged Americans to stock up on plastic sheeting and duct tape to seal windows in case of biological or chemical attacks.

    Now, however, the government, while still conducting business under a yellow terrorism alert, is no longer taking a lead role in encouraging preparedness. For some, this leaves a vacuum of reassurance, and plenty to worry about.

    Esteemed economists debate whether the credit crisis could result in a complete meltdown of the financial system. A former vice president of the United States informs us that global warming could result in mass flooding, disease and starvation, perhaps even a new Ice Age.

    “You just can’t help wonder if there’s a train wreck coming,” said David Anderson, 50, a database administrator in Colorado Springs who said he was moved by economic uncertainties and high energy prices, among other factors, to stockpile months’ worth of canned goods in his basement for his wife, his two young children and himself.

    Popular culture also provides reinforcement, in books like “The Road,” Cormac McCarthy’s novel about a father and son journeying through a post-apocalyptic wasteland, and films like “I Am Legend,” which stars Will Smith as a survivor of a man-made virus wandering the barren streets of New York.

    Middle-class survivalists can also browse among a growing number of how-to books with titles like “Dare to Prepare!” a self-published work by Holly Drennan Deyo, or “When All Hell Breaks Loose” by Cody Lundin (Gibbs Smith, 2007), which instructs readers how to dispose of bodies and dine on rats and dogs in the event of disaster.
     
  4. Probably not a bad idea to have a few weeks supply of food on hand, just in case. :D
     
  5. Stock market is in complete denial. I am quite sure we will see a crash as bad as 87.

    Complacency in the current environment is truly a marvel.
     
  6. But Google and IBM beat earnings estimates so everything is great :D
     
  7. Go all in short. You will make a fortune.
     
  8. I am and I will.
     
  9. What I don't understand with Rice craze is the fact that the world rice prices seems indexed on Chicago' Rough Rice which trades about 1000-2000 contracts per day on the front month...

    Please tell me that the 5 guys trading 10 lots on this market have no influence on world rice prices and thus famines in Africa and that this bull market has external causes ...
     
  10. Uncle Ben = Helicopter Ben's evil twin.
     
  11. my neighbor Ramesh and Sangeeta are going ape-shit without their basmati. Its only 4 rupees for a 50lb bag in bangalore. ( that's 10 U.S. cents).
     
  12. that is only possible with a substantial subsidy from the indian government.
    how is the subsidy calculated?
     
  13. Holy Crap, welcome to Soviet America.
     
  14. Japan turns down 60,000 tons of rice due to high prices - Thai exporters
    04.23.08, 7:34 AM ET


    BANGKOK (Thomson Financial) - Japan has turned down 60,000 tons of rice from Thailand after the asking price nearly doubled in the space of a month, the Thai Rice Exporters Association said Wednesday.


    http://www.forbes.com/afxnewslimited/feeds/afx/2008/04/23/afx4922498.html
     
  15. This week's 'Economist' is headlined "The Silent Tsunami" which perhaps is not so silent anymore.

    lj
     


  16. The Rice market is predominantly cash, not a futures one. When you trade the physical rice, what you are looking for is the basis spread (the spread between cash vs future price).

    The spread has been widening for sometime, That has been putting a lot of pressure on producers. with that basis divergence, multinational grain companies will not buy grain more than 60 days out, That has put farmers in financial trouble, unable to project sales income for the upcoming harvest or prepay input costs. with futures and cash not converging anyway, and banks drained of extra funds to finance positions of farmers or grain elevators, there's no incentives to hedge.

    On The other hand, According to a United States Department of Agriculture (USDA) report, the world's milled rice stocks in 2007-08 totalled 77.19 million tonnes against total demand of 451 million tonnes and Vietnam has maintained rice stocks at only 1.09 million tonnes of milled rice against demand of up to 23.72 million tonnes. Asia is the world largest producer and consumer of rice.

    The USD has been a critical factor in this ecuation.
     
  17. Thanks a lot for the clarification... I was quite sure RR was not of great influence, given the quantity of rice traded.
     
  18. 15% unemployment. Martial Law. If I had put this up weeks ago, you would have laughed.

    That's when I heard this stuff from very reliable sources. Are you laughing now?

    When gas is four bucks, and you can't get food, guess what happens. I would suggest, as quoted in "HedgeHogging", 'America, it's a time for losing.".

    I hope not. But I have no faith in Washington or Wall st. to ever do the correct thing.
     
  19. wait till Summer then the rice will really hit the fan.

    also, go to malls, no body there when gas is 3.88.

    only thing pushing up market now is its attempt to find parity with rate of inflation.
     
  20. Went to Costco Monday to buy some rice because I'm nearly out, but no dice, empty shelf. Called them this morning few minutes before open and the good man told me they got 45 bags today, I told him I'm there.

    As I walk in shortly after open, people are coming out with carts loaded 4, 5, 6 bags. I immediately shifted into high gear and sprinted toward the target area. Upon arrival, there's only a few bags left. I barely finished loading a few onto my cart, I noticed the empty pallet is all that's left. Man, I really lucked out.

    I can't hardly believe I had to go through all that just to get my hands on some basic food. What the hell is the world coming to?
     
  21. Why didn't you just buy one of the other thousands of food items that ARE in plentiful supply in a Costco or Sams? Like a 30 pack of breakfast burritos, a 50 pack of barbecue spare ribs, or a 100 pack of corn dogs??? :p

    Rice is a major sustinence food in other regions of the world, but it certainly isn't in the USA. Of course, that doesn't speak much for the health of Americans......
     
  22. I think we told you. Hey, anybody remember 73? 75? 80? It wasn't until Aug 82 the market moved, and then the suckers came in May 83.

    Wanted to sell a truck. Brand new Dodge piece of shit. 1980 or so. He says, we can't sell a new one. What do you think this is worth??? 20% interest rates. It can happen folks. That 's what you're seeing, but with low rates.

    Lots of opportunities will present themselves. But they'll be al lot of pain.
     

  23. This is worse than energy crisis.
     
  24. Because I can't afford that other stuff. I haven't had any work all week. I'm in a recession and I'm not joking.

    Would it surprise you that rice is pretty major in certain parts of the good ole USofA? Like here in the heart of Silicon Valley for example, where Asians together with people of all colors probably outnumber Caucasians.
     
  25. The irony of the rice issue is that the USA is actually a major world rice grower in fact the 4th largest and an exporter.

    Lets see if I was a US farmer and rice can be exported overseas to earn more $$$ than sold in Walmart and Costco what should I do?

    http://www.arkansasricegrowers.com/

    http://www.usriceproducers.com/

    http://sev.prnewswire.com/agriculture/20080420/NYSU00120042008-1.html


    ...Total U.S. rice exports for 2007/08 are forecast to increase approximately 20 percent from the previous year -- in part due to export restrictions imposed by Vietnam and India. In the United States, rough rice exports largely destined for Mexico and Central America, are forecast to improve 14 percent from the previous year. Additionally, U.S. milled rice exports are forecast to jump 25 percent; although still 10 percent below the 2005-06 crop year.

    "U.S. export prices continue to experience upward pressure from several factors, including healthy sales, generally high commodity prices and the relatively weaker U.S. dollar," said Whitehead.
     
  26. The old saying "You reap what you sow" certainly applies to the economic management of the US economy. Trade deficits, federal deficits, state deficits, corporate deficit, and personal deficits.......

    Half of the airlines, auto and financial corporations should have gone bust long ago....Maybe the fed or the US Government will be first.

    I put greater than 50% odds that that the US will default within 25 years.
     
  27. Rice omfgwtf? I'm waiting for the twinkie riots. Yo yo yo America, no twinkies. Cellulite flowing in the streets, it'll be the wake up call.
     
  28. I laugh at the fools buying gold and silver when Rice is the commodity to stockpile for future barter.
     
  29. I do - its called "my gut" :D
     
  30. Go to the ethnic (eg, Indian) stores. Man selling 40 pound bag of imported rice for $27. And there was NO shortage... Rice up the walls...
     
  31. There's no food shortage as long as McD's sells double cheeseburgers with real meat product and real cheese product for ONE DOLLAR.

    That's right ONE DOLLAR.

    For REAL MEAT PRODUCT and REAL CHEESE PRODUCT.

    And it's DOUBLE.

    Beat that.
     



  32. You can thank american hedge funds using insane leverage for this. Pretty much every commodity has more contracts outstanding than there is allowable physical deliverables.

    Interestingly enough, the US congress deems it necessary to increase farm subsidies so people don't grow crops. Add in the retarded ethanol subsidies , burning food to drive your 10 mpg SUVs. The greed factor in US financial markets is out of control.
     
  33. Sounds like it's really getting bad out there... you can only buy EIGHTY POUNDS of rice per trip to Sam's Club now.

    :D
     
  34. No kidding....I don't even know what to do with a 20lb bag of rice.
    Helps traction in the snow.

    Some of these households have 20 or 30 people living in them at 80lbs per trip I guess it adds up
     
  35. Just hope when the idiots buying all this rice,realize this is a big hoax that they will donate to the poor. This hoax is brought to by the broken commodity markets. Contract(postion) limits and margin requirments must be changed to slow this specualtion.
     
  36. Just get the brown rice. Plenty of that.

    Takes 45 minutes to cook the stuff, but it's better for you!:p
     
  37. Won't be a true crisis until we can buy only 80 pounds of BEER!
     
  38. Stop blaming the evil speculator lurking in the shadows for prices rising. The problem is foreign governments restricting trade and hoarding. Don' t be a douche. Commodity markets work great.
     
  39. The primary consumers of this staple are typically from very opportunistic, corrupt and deceitful cultures. Like he said.


    Stop blaming the evil speculator lurking in the shadows for prices rising. The problem is foreign governments restricting trade and hoarding. Don' t be a douche. Commodity markets work great. [/QUOTE]
     
  40. Wifey checked with the in-laws in the Philippines. There is no rice shortage. The President there, a Bush associate from their Yale days, is under investigation for corruption so they are spreading the rice famine issue as a diversion, a canard.
     
  41. Load Up the Pantry
    by Brett Arends
    Wednesday, April 23, 2008
    provided by

    I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.

    No, this is not a drill.

    You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.


    Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

    "Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)

    Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.

    Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.

    And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They're all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.

    These are trends that have been in place for some time.

    And if you are hoping they will pass, here's the bad news: They may actually accelerate.

    The reason? The prices of many underlying raw materials have risen much more quickly still. Wheat prices, for example, have roughly tripled in the past three years.

    Sooner or later, the food companies are going to have to pass those costs on. Kraft saw its raw material costs soar by about $1.25 billion last year, squeezing profit margins. The company recently warned that higher prices are here to stay. Last month the chief executive of General Mills, Kendall Powell, made a similar point.

    The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.

    A secondary reason has been the growing demand for ethanol as a fuel additive. That's soaking up some of the corn supply.

    You can't easily stock up on perishables like eggs or milk. But other products will keep. Among them: Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables. The kicker: You should also save money by buying them in bulk.

    If this seems a stretch, ponder this: The emerging bull market in agricultural products is following in the footsteps of oil. A few years ago, many Americans hoped $2 gas was a temporary spike. Now it's the rosy memory of a bygone age.

    The good news is that it's easier to store Cap'n Crunch or cans of Starkist in your home than it is to store lots of gasoline. Safer, too.

    Write to Brett Arends at brett.arends@wsj.com

    Copyrighted, Dow Jones & Company, Inc. All rights
     
  42. I heard somewhere that the average city in the US only has a 3 day supply of food in grocery stores. Only 2 days supply at the average hospital. Just in time warehousing is the cause. I doubt we will see anything serious, but in a disaster or short term disruption (Katrina?), it would be wise to have at least a week or 2 supply of staples. Bunch of sites in internet, just google "years supply of food".
     
  43. Oooo evil rationing limits purchases to EIGHTY POUNDS! The horror! Better stock up before the food riots start. If you rent a moving truck and spend all day going in and out of Costco I bet you can get a few tons - that should hold anybody for a week or two.

    LMAO.

    And some bozo is claiming martial law is next? And some other moron thinks this is just like the Soviet Union? No comparison to Hitler yet, but I'm sure that's coming.

    Short your brains out. Whoops, that won't be much. How about "put every dime you have or can borrow on the line"? Use options, get that extra leverage to really rake in the money. Buy the really out of the money puts, this market is going to lose 90% if martial law is imposed to prevent food riots and people are dying of starvation in the streets. When you are rich beyond measure, you'll be able to bribe government officials to let you into Area 51 where you can steal a spaceship and go visit Elvis.
     
  44. An "unintended consequence" of outsourcing. Not only did we "give away well paying middle class wage jobs so that we could continue to buy cheap stuff at Wal-Mart", we hosed ourselves... We've accelerated the development of a greater middle class in Asia. They want more, higher quality food + energy to drive their motorized vehicles and air conditioning... thus driving up the price for those commodities world wide.

    Oops...
     
  45. Now that seems pretty reasonable. Wouldn't hurt to sock away some of what you'll use and will not spoil. At the TGregg Estate, we've already got more than a years worth of some things (like pasta and yes rice), mostly because we obtained them for an outstanding price. We do like buying low.
     
  46. Can I grow RICE in Florida?? not for a profit motive, I just want to help the world out when in dire straits..
     
  47. I just let our housekeeper know to prepare some Cali and Unagi rolls for lunch. We've had a large bag of Nishiki sitting in the pantry for a long time and I don't want to be accused of hoarding!
     
  48. A years worth? You are either like me and eat very little of the stuff or you are a bit of a nut!
     
  49. Last time I remember eating rice (of any great portion) was when I was 11yrs old. Won't miss it at all. If I never eat rice again, it will be too soon.
     
  50. What stock should buy? Is there a rice stock?

    BG, ADM?
     
  51. We thought you were going to help out the world by becoming the next John Bogle or Peter Lynch...
     
  52. at 3500 calories energy equivalent per pound of fat, most Westerners already have a few weeks storage around their waist...
     
  53. Blame or not, when the shit hits the fan, governments are going to go after the speculators as they DO influence price (and mostly in the up direction as of late). Expect higher margin requirements - much higher - at the very least.
     
  54. We probably go through 4 cups of prepared rice a month. 48 a year. So that's a third of a cup dried rice times 48 for 16 cups of dried rice a year. Not sure how much dried rice weighs, but I'd guess that a one pound bag has about 3 cups. So that's 5 bags of rice that will last us a year. Even if a bag is only 2 cups, that's 8.

    Assuming 2 cups per pound, 80 pounds of dried rice makes a whopping 480 cups of prepared rice.
     
  55. I am going to store some rice this weekend, unlike electricity or gasoline, consumer do have the power to store rice, when a few stores run out of rice, it will create a public panic which will run out of control.
     
  56. Things like these usually signal market tops.
     
  57. I think I'll go LONG on rice. There is just no telling how high this can go with the amount of rice people intake in China, Japan and India. This maybe the wildest bull ride yet...

    me & my Truck headed to the nearest Sam's club... but, alas I would only be able to get 80Ibs today.. I think I'll just dollar cost average into a long position without tipping off my hand to anyone. This means I might have to use my friends etc to source more from other discount clubs and neighboring counties.

    This may very well be my best trade ever..

    all the joking aside: I'm already long on rice even without realizing it.. I'm just trying to unload some positions and trying to get some liquidity at the top.
     
  58. Short weddings and go long bird seed as one-off plays. With the high cost of rice, nobody wants to throw a wedding. If they do, they'll toss bird seed at the newlyweds.

    You'll clean up. :D
     
  59. Another LONG rice play would be agricultural land that is suitable for rice cultivation.

    Why do we do not grow rice in America?? I'm just baffled. Or buy wheat farms and replace them with rice plantings for a turnaround play.
     
  60. :confused:

    According to estimates for the 2006 crop year, rice production in the U.S. is valued at $1.88 billion, approximately half of which is expected to be exported. The U.S. provides about 12% of world rice trade. The majority of domestic utilization of U.S. rice is direct food use (58%), while 16 percent is used in processed foods and beer respectively. The remaining 10 percent is found in pet food.

    http://en.wikipedia.org/wiki/Rice#United_States
     
  61. What does this amount to.. like 10 acres worth of r$ce production ??
     
  62. Just like Marie Antoinette said...
    "let them eat rice" Jeesh, I miss her.
     
  63. The rumor is Chinese will start to use rice to produce cooking wine and the world will run of rice soooon