Tuesday, May 06, 2008

Rice as nice 

The morning paper brought a story that local food vendors and restaurants -- and we have many Asian markets here for a community St. Cloud's size, one reason I love the place -- haven't experienced the widely reported shortages of rice that have pushed Sam's and Costco to set purchase limits to prevent middlemen making runs on their rice supplies.

�I believe I have enough stock," said Kim Nguyen, manager at Viet-Tien Market in St. Cloud.

When Nguyen first heard about rising prices of rice and rationing at warehouses, she was concerned that the market would not have enough stocks on the shelves.

�Then I thought it was a short-term shortage," Nguyen said, referring to a state of consumer panic surrounding the warehouse rations.

Viet-Tien Market has not rationed any of its sales on rice.

Cub Foods is not rationing rice either, spokeswoman Lee Ann Jorgenson said. Neither is Coborn's.

�We have seen prices go up, but we don't see any need to ration our stock right now," Coborn's spokesman Steve Gottwalt said.

Restaurants, such as China Restaurant and Hong Kong Restaurant in St. Cloud, also are in the clear for now.

Nguyen said some specialty rices, such as jasmine, are still easy to get. However, she is limited by her supplier to 10, 10-pound bags of basmati rice per order.

Prices go up to help ration supplies, but that's not the only thing at play here. Rice is rice, pretty much a staple and where prices aren't going to be the competitive margin on which suppliers operate. Ms. Nguyen has alternatives to where she can buy her rice. If she cannot be sure that her supplier will be with rice each week, she may seek alternative suppliers. The suppliers of course bring rice and lots of other products on which their profit margins may be higher. So a rationing in their case might help assure Ms. Nguyen that the rice will be there, and keep her loyal to her current supplier.

The Costco/Sam restrictions are another matter. Those larger chains are seeking price information, and in a noisy market they would like several transactions to confirm a change in market conditions. One speculator running out a store on a very large purchase not only inconveniences that store's other customers but also might provide bad price information to the larger distributors.