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Rice panic grips even major producer of the staple
Toronto Globe and Mail


April 29, 2008

HO CHI MINH CITY, Vietnam -- The mob of shoppers had been waiting patiently for their promised rice for more than an hour, and now the mood was beginning to turn ugly.

Nearly 150 customers surged toward the supermarket's storage room, while security guards wielded wooden sticks to try to keep order. "Please don't panic like this," a clerk begged the crowd.

As the chaotic queue grew longer, the crowd became angrier. "Why does the government say there is rice here, but there isn't any rice?" one man shouted.

This was the scene Monday in a state-owned supermarket in Vietnam as yet another country tumbled into "rice fever" -- a dangerous brew of skyrocketing prices, perceived shortages, hoarding, panic buying and government intervention. The food crisis has swept through dozens of countries this year, sparking riots and unrest.

Rice prices in Vietnam have soared in recent days, with some shops doubling their prices. Many rice merchants and producers have responded by stockpiling supplies and refusing to sell, while some rice shops have closed temporarily and other retailers have seen their supplies dwindle or disappear. It's being called the worst rice crisis in Vietnam in the past 20 years.

The paradox is that Vietnam is one of the world's greatest rice producers. This heavily agricultural country is the second-biggest rice exporter in the world, usually providing 20 percent to 25 percent of the global supply of internationally traded rice. Yet even here, the price speculation is running rampant, leaving millions of people in deeper poverty.

The Vietnamese government, an authoritarian Communist state that has shifted to frantic capitalism since the 1980s, is desperately trying to control the rice crisis by releasing new supplies and vowing severe punishment for speculators. In a bid to protect its domestic supply, Vietnam has cut back on its rice exports, causing further damage to the global food supply.

The government's propaganda organs were insisting yesterday that Vietnam has no domestic shortage of rice, yet its consumers are nervous. The long queues for rice are the first in Vietnam since the old days of the Communist command economy in the 1980s, some consumers say.

"These prices are very crazy," said a manager at Citimart, a major supermarket in Ho Chi Minh City, the country's biggest city. His store halted its rice sales on Sunday because of skyrocketing prices and it still had no rice on its shelves yesterday. Even its instant-noodle products were depleted because consumers were shifting to noodles as a rice substitute.

"We don't dare to buy from our suppliers," the manager said. "The prices are so high, and we don't know if we can buy it at that price."

The government tried to ease the crisis Monday by providing its own supply of rice to a state-owned supermarket chain at prices below the wholesale price. But by yesterday afternoon, the subsidized supplies had vanished, and a clerk removed a sign that displayed the cheaper prices.

When the supermarket finally distributed rice to shoppers, each customer was limited to five kilograms -- half the quota of a day earlier -- and the price was almost $1 a kilogram, nearly 50 per cent higher than the promised price. Some shoppers complained that the rice was poor quality.

Vietnam's news media said the soaring prices were caused by speculators and smugglers who were profiting from the crisis by selling rice abroad or withholding supplies to await higher prices. Some suppliers admitted they were refusing to sell rice because they were hoping that the price increases would continue.

Government leaders tried to calm the jangled nerves of consumers. "We have enough rice," Prime Minister Nguyen Tan Dung said. "The government would never let its people go hungry for lack of rice."

Distributed to subscribers for publication by
Scripps Howard News Service,

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