We need to start being concerned about food shortages/hunger inside America eventhough the press and the presidential candidates are not showing concern. The Costco story is another sign of things to come:
THE panic over global food shortages and rising prices gripping developing nations has spread to the world's wealthiest countries, with giant US-based retailer Wal-Mart rationing rice sales.
Wal-Mart's warehouse chain Sam's Club became the second retailer in the US to limit bulk purchases of rice this week, citing "recent supply and demand trends". Earlier in the week, Seattle-based Costco Wholesale Corporation imposed limits in some stores on bulk rice purchases.
The extraordinary move constitutes the first time food rationing has been introduced in the US. While Americans suffered some rationing during World War II for items such as petrol, light bulbs and stockings, they have never had to limit consumption of a key food item.
World rice prices have more than doubled in the past year as demand has outstripped supply, with the drought-ravaged Australian crop blamed for contributing to the problem.
Australia's rice production has collapsed, with many farmers given a zero water allocation from the Murray River. This year's crop will be the smallest since 1960, with exports barely a 10th of recent years.
Until 2002-03, Australia exported on average 620,000 tonnes of rice a year - or 80 per cent of what it produced. But figures compiled by the Australian Bureau of Agricultural and Resource Economics show the 2007-08 export crop will be 70,000 tonnes, with no improvement the following year.
Around the world, countries are restricting exports of rice and other grains as food prices rocket and nations move to ensure their own food security. The international price of rice has risen 118per cent in the past year despite world rice exports rising from 22.7 million tonnes in 2000 to a forecast 29.6 million tonnes this year.
Gary Helou, chief executive of Australian rice exporter Sunrice, said the accusation that the drought in Australia was causing food rationing in the US was "terribly ill-informed", saying Australia was a small player in the global rice market.
Ricegrowers' Association president Les Gordon agreed, saying prices were high due to "a straight-up case of supply and demand". "Supply has been slowly dwindling all around the world for the last 10 years, and it became apparent to our grain marketers 12 months, two years ago that it really was heading for a very low level," he said.
He is bemused by US supermarkets blaming Australia for shortages. "I can understand them having a run on rice in the supermarkets, but how they could tag that to drought in Australia is ... nonsense. None of our rice goes to America."
In Britain, rice is being rationed by shopkeepers in Asian districts to prevent hoarding.
More signs of an economy headed towards crisis:
Sales of new homes plunged in March to the lowest level in 16½ years as housing slumped further at the start of the spring sales season. The median price of a new home in March compared to a year ago fell by the largest amount in nearly four decades.
The Commerce Department reported Thursday that sales of new homes dropped by 8.5 percent last month to a seasonally adjusted annual rate of 526,000 units, the slowest sales pace since October 1991.
The median price of a home sold in March dropped by 13.3 percent compared to March 2007, the biggest year-over-year price decline since a 14.6 percent plunge in July 1970.
The dismal news on new home sales followed earlier reports showing that sales of existing homes fell by 2 percent in March. Housing, which boomed for five years, has been in a prolonged slump for the past two years with sales and home prices falling at especially sharp rates in formerly boom areas of the country.
For March, sales were down in all regions of the country, dropping the most in the Northeast, a decline of 19.4 percent. Sales fell by 12.9 percent in the Midwest, 12.5 percent in the Midwest and 4.6 percent in the South.
In other economic news, orders to factories for big-ticket manufactured goods fell for a third straight month in March, the longest string of declines since the 2001 recession, while applications for unemployment benefits fell by 33,000 to 342,000.
The Commerce Department said that demand for durable goods dropped by 0.3 percent last month, a worse-than-expected performance that underscored the problems manufacturers are facing from a severe economic slowdown. The last time orders fell for three consecutive months was from February to April of 2001, when the country was sliding into the last recession.
The weakness in manufacturing orders was led by a 4.6 percent drop in orders for autos, a sector that has been hard hit by soaring gasoline prices and the weakening economy, which have cut sharply into car sales. Orders in the category that includes home appliances fell by 6.6 percent. This industry has been hurt by the two-year slump in home sales.
President Bush on Tuesday said the economy was not in a recession but a period of slower growth. However, economists who believe the country has fallen into a recession pointed to the string of declines in manufacturing orders to support their view.
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