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Rising rice prices hit Long Island (NY) businesses

7:58 PM EDT, May 13, 2008

Over the past month, Pali Wijebandara, general manager of the Sitar Indian restaurant in Huntington, has seen the price of his basmati rice increase by nearly 200 percent.

"We have to do something," he said last week after a bustling lunch hour, "but we're not sure what."

Facing soaring prices and reports of a global rice shortage, some supermarkets and wholesale food outlets on Long Island are limiting customers' rice purchases on top of raising prices.

Long Island supermarket chains Pathmark, Waldbaum's and ShopRite say they are limiting customers' rice purchases. Shoppers at Pathmark and Waldbaum's stores can buy 40 pounds of rice at one time; ShopRite is limiting customers to four bags of rice, any size. There are no limits on purchases at other supermarkets, such as King Kullen or Shop & Stop stores.

Both Costco Wholesale Corp. and Sam's Club instituted 80-pound limits on imported jasmine and basmati and long-grain white rices late last month, just after rice futures jumped to an all-time high of more than $25 per 100 pounds on April 24. Yesterday, rice futures were at $22.30 per 100 pounds on the Chicago Board of Trade.

Globally, there is also concern that the devastating May 3 cyclone in Myanmar may drive up already-high food prices. The Irrawaddy Delta region, which produces one-third of the Southeast Asian country's 10 million tons of rice, was hit hard by the cyclone. Reports indicate it wiped out about 65 percent of the areas that produce Myanmar's rice.

According to the U.S. Department of Agriculture, it is not yet clear to what extent the Myanmar situation will affect world rice prices or supply, but it estimated that the average price in the 2008-2009 growing year would increase as much as 48 percent over last year.

Restaurants such as Sitar, which are also citing climbing overall food costs, are considering raising prices or already have instituted increases in menu items.

Small stores and specialty markets, like Oriental Groceries and Products Center in Stony Brook, also have restricted purchases. Owner Hsiao Yeh said his customers can purchase up to five bags of rice, any size, per visit. "No complaints, because my customers know what has happened in the world and they are expecting that prices will be going up," Yeh said. At his store, Thai jasmine rice has taken the biggest jump; a 25-pound bag that was a little more than $13 two months ago is now $22.50.

Still, there are dissenters about the rice crisis. David Coia, a spokesman for the Washington-based USA Rice Federation, an advocacy group, said that limiting purchases is "much ado about nothing." Coia said the problems in small rice-producing nations are isolated and that in the United States there's more than enough rice to go around. In fact, global rice production is at a record high, he said.

"People see what's happening in some foreign countries and read headlines and think maybe they should hoard rice," Coia said. "It's totally unnecessary."

Source: NYNewsday