Panic-buying of Indian rice clears shelves, helps push prices higher amid export ban

Customers of the House of Spice in Selden  were buying such unusually large amounts of rice last weekend that the owner of the Indian grocery store posted a sign Monday restricting the sales of the 20-pound bags, he said.

“One customer, one bag.  We can only give limited,” said Nasir Hameed, whose store also sells Middle Eastern and other South Asian foods.

He has only about five bags left of Sona Masoori rice, down from his usual number of 80 to 90 bags, and his distributor has told him he won’t be getting any more soon because it is out of stock.

Hameed and other owners of South Asian grocery stores are contending with panic-buying customers clearing shelves of rice following India’s ban on exports of non-basmati white rice last week.  The stores, along with South Asian restaurants whose rice is sourced from India, are also paying higher wholesale prices, leading to higher retail prices, they said.

India enacted export restrictions last week to curb domestic inflation — the government said retail rice prices in the country rose 3% in a month — following monsoon rains that damaged crops.

Rice is the primary staple food for more than 50% of the population worldwide, with Asia, Sub-Saharan Africa, and South America being the biggest-consuming regions, according to the U.S. Department of Agriculture.

Market sources indicate that India’s ban does not apply to countries with high levels of food insecurity, such as Bangladesh and Nepal, said Rob Hatchett, senior economist at S&P Global Commodity Insights.

India is the world’s largest exporter of rice, but the United States produces most of its own rice, so there is no shortage of inventory at mainstream grocery stores, he said.

“So, there is a lot of panic-buying of Indian rice but there is still plenty of substitutes or alternatives for that rice,” he said.

Last year, the United States produced 5.1 million metric tons of milled rice, mostly from Arkansas, Louisiana, Mississippi, Texas and California, he said.

The second-biggest source of rice in the United States came from Thailand, which provided 751,355 metric tons of milled rice, while India was the third-biggest source, 273,967 metric tons, Hatchett said.

The Village – The Soul of India, a restaurant  that opened in Hicksville eight months ago, is heavily dependent on rice, since it is a vegetarian eatery, co-owner Sarvinder Singh said.

Before last week, his restaurant was paying $30 for a 35-pound bag of white rice from a local wholesaler that sourced the grain from India.  Now the price is about $50, he said.

Singh doesn’t want to raise his menu prices because that would entail having new menus printed, which is expensive, and it might deter patrons from visiting the new restaurant, he said.

“I’ll just keep my fingers crossed that the price will come down,” he said.     

Apna Punjab Farmers Market, a small Indian grocery store that opened in Farmingdale in November, saw the wholesale price it pays for white rice increase 20%, from $20 to $24, for a 20-pound bag, so it raised its retail price by the same percentage, to $26, owner Sonu Singh said.

He is also seeing prices for alternative types of rice, such as basmati, increase, he said.

“But we don’t know what’s going to happen in the future … down the line, they may ban basmati as well,” he said.

By Tory N. Parrish

tory.parrish@newsday.comToryParrish1

Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.