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Rice Shortage Hits Expat Indian Community

New America Media, News Report, Viji Sundaram and Ketaki Gokhale Posted: Apr 24, 2008

Editor's Note: Bay Area Indian grocery store owners are cracking down on rice hoarding as food prices go up around the world. Viji Sundaram and Ketaki Gokhale are editors for New America Media.

When Arif Casha of Pashas Market in Cupertino, Calif., returned from a short vacation a few days ago, he was shocked to see all of the rice bags gone from his store shelves.

I was gone for just a week and the whole place was cleaned out, said Casha, one of several South Asian American grocery store owners who are reeling from the ban the Indian government enacted earlier this month on the export of all varieties of rice except basmati. I had four different varieties of rice. I thought we had been robbed.

From New York to California, rice bags are flying off the shelves of grocery stores as expatriates from India, China and other Asian countries are going into the same kind of panic that gripped Indian Americans in the summer of 2006, when India banned the export of lentils to offset a domestic shortage. Indian American grocery store owners say the popular Sona Masoori brand of rice is being snapped up like never before.

The cost of rice in India has increased by 70 percent in the last year alone, according to the United Nations Food and Agriculture Organization. This is partly the result of a rise in demand in some rice-importing countries, and hoarding, stemming from a fear that the price will continue to increase.

The spike is also part of a general surge in food costs worldwide. That increase has contributed to inflation in India, which is at a nearly three-year high.

Rice, the staple crop in much of Asia, features prominently in the daily meal of about 65 percent of Indias 1.2 billion residents and a large part of its 25 million expatriates. India is the second-largest producer of rice in the world, next to China. In both countries, the price of rice is sky-rocketing, and the effect is being felt in the United States.

Oh man, prices are going through the roof, moaned Sanjay Birla, vice president of the Hayward, Calif.-based Indian grocery distributors, Nuts & Spices. Weve been in business for 30 years and weve never seen anything like this. At the end of the day, well have nothing to sell.

The Chinese government has taken actions to protect Chinese consumers by restricting exports, a move that could have a major impact on importers, including North Korea, the Philippines and Afghanistan. In the Philippines last week, President Gloria Arroyo asked authorities to crack down on hoarders. Officials have said they could be charged with economic sabotage, a crime that carries a life sentence.

The chief executive officer of Costco Wholesale Corp. told Reuters April 22 that his stores had seen some unusual demand for such items as rice and flour in the last few days as customers try to stock up. He said some Costco stores, including certain locations in the San Francisco Bay Area, have put limits on the sales of those items.

Neelakshi Kumar, owner of the Northern California-based India Cash & Carry, said she has put a limit on rice purchases from her stores in Sunnyvale, Foster City and Fremont.

We have some rice in stock, but customers are overstocking, so Ive limited purchases to one (20 pound) bag per family, Kumar said, adding: These are hard times, even for the customers.

S.K. Sharda of New India Bazaar, in Milpitas, Calif., said that because wholesalers have severely cut back on supplies to stores such as his, he too has been forced to slap limits on his customers.

We are telling our regular customers that they can only buy one bag a week, he said. When were out of rice, we (will) have no choice but to turn people away.

Unlike Indias ban on the export of dals that has still not been lifted because of a continued domestic shortage, there is a likelihood that the rice export ban could be lifted eventually, said an Indian embassy official who did not want to be named. Adequate rainfall and sunshine have boosted yields.

Yet, earlier this week in the Indian state of Kerala, shops started putting up rice not available signs, according to news reports.

Prem Garg, managing director of Shivnath Rai Harnarain, one of the largest exporters of basmati rice, is quoted in news reports as saying that Pakistan will stand to gain from exports to the markets created by Indian exporters. Hes probably right.

Im putting in an order for Pakistani basmati, said Casha, noting: My suppliers say theres no guarantee they will be able to fill the order.

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