North Texas stores report run on gourmet rice
Star-Telegram Staff Writer
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Reports of India and Thailand cutting exports of high-priced and fragrant gourmet rice have sent Asian families and restaurant owners in North Texas scurrying to buy what they can.
"When people see the prices, they say, 'Something is wrong,'" said Surinder Singh, owner of southwest Fort Worth's India Bazar, which specializes in South Asian and East European groceries. "Then they shop all around, even go to Arlington. When they come back, they're angry but they'll buy three 20-pound bags instead of their usual one."
Singh still has supplies, but they're getting tighter.
Costco and Sam's Club now allow a maximum of two to four institutional-size bags per customer, depending on supply.
On Saturday, Costco's Fort Worth store was sold out of both Indian basmati and Thai jasmine. And a Sam's nearby on Bryant Irvin Road has been out of basmati rice "for months," an employee said. Its Westworth store still had 20-pound bags at $15.42.
Richard Galanti, Costco's chief financial officer, said panic buying at his chain began about eight days ago in the San Francisco Bay area when a store manager limited sales to a single bag in response to a run on supplies. A local reporter who happened to be shopping wrote a story that got picked up around the region, then nationwide, spreading panic buying, he said.
For the week ending Sunday, Costco sold four times its typical volume of rice in that region, which includes Washington, Oregon, Montana, Alaska and Hawaii, Galanti told the Star-Telegram.
What's happening
A number of factors have converged to create shortages: bad weather in some countries, higher transportation costs and the emergence of an affluent middle class in both India and China demanding better food, said Hamendra Paberi, Houston-based vice president of Indian-owned Kohinoor Foods USA.
India had an ample crop, but shortages of rice grown elsewhere and higher freight charges pushed up basmati prices in the globalized economy, Paberi said.
As for American-grown long grain rice, which most U.S. consumers eat, "there are plenty of supplies," said L.G. Raun, a large grower in Wharton County, 90 miles southwest of Houston, who produces both long-grain and aromatic, organic jasmine rice, which is sold under the Lowell Farms brand.
Worldwide response
Major exporters in India, Thailand and Vietnam announced curbs on exports to ensure enough supplies for their own people.
India cut exports of new hybrid strains of basmati, which had accounted for 40 percent to 50 percent of exports to the United States, while adding a $100-per-ton export duty on "traditional" basmati grown in Punjab state, Paberi said.
On Sunday, Thailand's prime minister said his country is backpedaling on its export ban, vowing that it will make up for any rice shortage in neighboring Malaysia.
Vietnam, another major exporter, which said in March that it would cut shipments by 1 million tons, said Sunday that it will have enough harvested this year to fulfill domestic and export demand.
Problems in Texas
Prices for both types of basmati have doubled in the past year in Texas, Paberi said.
He has tried to assure wholesale customers -- mainly Indian restaurants statewide -- that enough Punjabi basmati is in the pipeline.
"But they're buying palettes of 60 [20-pound] bags when before it was five or 10 bags," he said. "They are all panicked. They feel that after two, three or four weeks they won't be able get any, or the price will be too high even though I told them it will only be a dollar more per bag."
The run on rice, which has raised the price of all varieties, hasn't helped Texas growers yet, Raun said.
"We're all sold out," he said. "When prices started going up in January only about 25 percent of the rice harvest was left."
Raun believes that the high prices on the commodity exchange may not be long term.
"There's a lot of nontraditional people involved in the futures market, a whole of speculation that we never had before," he said.
This report includes material from The Associated Press and Bloomberg News.
BY THE NUMBERS
19.8 Pounds of rice consumed annually by Americans
198 Pounds of rice consumed annually by Chinese
TOP RICE EXPORTERS
In metric tons; based on 2004 figures
Thailand: 10 million
Vietnam: 4.3 million
India: 3.1 million
Pakistan: 1.9 million
Sources: UNCTAD, USDA
barry@star-telegram.com
