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Immigrants worried about cost stock up on rice

Shoppers surveyed shelves loaded with rice at the Ranch 99 Asian supermarket, chatting in languages from Mandarin to Portuguese as they hunted for their favorite varieties, checked brand names and compared prices before heaving 50-pound bags into their carts.
Rice Price Consumers
One New York grocer isn't worried about cost dimming demand. "The Chinese eat rice," he says. "They have no choice."Jeff Chiu / AP
/ Source: The Associated Press

Shoppers surveyed shelves loaded with rice at the Ranch 99 Asian supermarket, chatting in languages from Mandarin to Portuguese as they hunted for their favorite varieties, checked brand names and compared prices before heaving 50-pound bags into their carts.

Skyrocketing prices and media reports of a shortage are driving many immigrants and U.S. Asians, Hispanics, Indians and others to stock up on rice — a once inexpensive staple that is reaching record-high prices across the country. In Indian corner markets and warehouse-sized supermarkets specializing in Asian goods, customers who usually take home a 20-pound bag are taking two, or even reaching for the 50-pound bag.

"It's all in the news, on TV and newspapers," said Grace Yap, originally of China, who was shopping at Ranch 99 with Birgitta Elmahdy, born in Sweden.

"I'm from a place that eats a lot of potatoes, but I bought two bags," Elmahdy said. "Then I thought about it — that'll last me a year!"

Emphasizing that there is no rice shortage in the United States, economists and commodity traders blame the price hikes confronting U.S. consumers on everything from the weather in producing countries to the increased buying power of countries like China. Chief among those factors was the decision by India, Vietnam, China, Egypt, Cambodia and Brazil to curtail exports to protect prices at home, said Nathan Childs, an economist and rice expert with the Department of Agriculture.

Seeking to tame rising rice prices, which have more than tripled since January, Thailand proposed an OPEC-style cartel on Friday with major rice exporters Laos, Myanmar, Cambodia and Vietnam to give them more control over international rice prices.

Take escalating prices, add to that news of food riots abroad, and many American buyers are choosing to be safe and purchasing more, especially since rice keeps well. That sends ripples all the way up the buying chain, said Pat Daddow, owner of the California Rice Exchange, a platform where farmers sell to processors.

"You hear prices are going up, so instead of buying one bag, you buy five," he said. "Everyone is anticipating a price rise, so they're trying to buy ahead of it. That creates a short-term rise in demand, and higher prices."

But is it hoarding? Not really, since there's no shortage, said Daddow.

"It's just rational economic behavior," he said. "If gas were going up tomorrow, wouldn't you fill up your tank?"

The stockpiling has led U.S. warehouse retail chains to limit sales of bulk imported Thai jasmine, Indian basmati and long grain white rice — varieties not grown domestically. Sam's Club, a division of Wal-Mart Stores Inc., caters to small businesses such as restaurants, and limited shoppers to four 20-pound bags each.

Whatever experts call it, shoppers are choosing to buy a little more of whatever type of rice they prefer.

"I've had to double the order," said Kirk Tamachi, the Asian food buyer for Berkeley Bowl supermarket in Berkeley, Calif. "We normally sell two, three (50-pound) sacks a day of the different varieties we have, but we got wiped out."

Grocery stores in Flushing, Queens, home to one of New York's three bustling Chinatowns, also have seen a spike in rice sales along with prices

Helen Suen, Hing Long Supermarket's accountant, has produced invoices documenting the store's rising rice costs. At the beginning of the year, she bought jasmine rice through a wholesaler. Each 25-pound bag was $11, which the store sold for $13. Today, Hing Long pays $17 per bag and charges $20.

If the trend continues, Suen thinks it will eventually cause panic among her customers.

Kuo-Chen Yen, manager of New A & N Food Market Inc., hasn't had trouble getting rice, just keeping it on the store's shelves. It usually takes him two weeks to sell 10,000 bags of rice. Now it only takes a week.

Until rice prices flatten out, Yen said he is forced to pass the cost increase on to consumers.

"I'm just paying more to get the rice," he said.

Peter Wong, who's in charge of the rice at Hong Kong Super Market in Queens, said he's seen his sales increase by 40 percent. But he's not selling out. Like Yen and Suen, Wong had plenty of rice to go around.

Wong didn't think there was a risk that his customers would stop buying jasmine rice, even as it topped $19 for a 25-pound bag.

"The Chinese eat rice," he said with a smile. "They have no choice."

All types of rice grown in the United States have seen price increases as they fill in demand usually met by their competitors abroad. California farmers, for example, will be selling more to Turkey, now that Egypt, which also produces medium-grain rice, pulled out of the export market.

Long grain rice grown in the Southern U.S. went from $397 per ton in April 2007 to $794 a year later. The medium-grain rice grown in California went from $551 per ton to $750 per ton in the same period.

But it's the imported rices that don't grow in the U.S. — the basmati or jasmine preferred by Southeast Asians, Indians, Filipinos and many Chinese — that are in the greatest demand and going for the highest prices.

In early April, Thai jasmine was selling for $1,000 a ton, and basmati for $2,000 a ton. That translated into 50-pound bags selling for between $36 and $40, which led some buyers to take home all the rice their local stores carried and created spot shortages in certain immigrant neighborhoods.

"People are so worried, everything is going up so much. It's so crazy," said Mahinder Parmar, owner of Milan, a Berkeley store selling everything from Indian music to sweets, instruments and spices.

Walking over to a wall lined with bags of rice, many of them holding varieties grown only in India, he punches a bag of Surti Kolam. It's had been marked up from $12.99 to $21.99.

"People hear what's going on, they want to come and buy 2 bags, not one," he said. "We'll sell what's in stock, and after that we don't know."