Thursday May 1

Restaurants feel pinch of rice prices

Rising food costs hurting local eateries

By Melanie Carroll / Daily News Staff Writer

When Raj Achari headed out to buy wholesale groceries Wednesday for the Indian-Chinese fusion restaurant he manages, he discovered there was no rice to be had.

"There was no more rice at the Restaurant Depot" in San Jose, Achari said.

As manager of Temptations in downtown Mountain View's Castro Street, he needs basmati rice, which has doubled in price recently, Achari said.

He and other restaurateurs in Mountain View and Los Altos are feeling the pinch, along with the fear that raising menu prices could discourage their customers from eating there.

Two of the largest U.S. warehouse retail chains last week limited the amount of rice customers may purchase because of what Sam's Club, a division of Wal-Mart Stores Inc., called "recent supply and demand trends." Seattle-based Costco Wholesale Corp. also put limits on bulk rice purchases at some stores. Global rice prices have risen sharply this year amid global food inflation, growing demand and poor weather in some rice-producing countries. Some Asian countries, including India and Vietnam, have curbed rice exports to guarantee their own supplies.

And rice cost increases are just part of the problem, said Shyam Choudhary, owner of the Shiva's Indian Restaurant on Castro Street.

Along with rising gas prices, chicken and wheat prices have doubled - on top of rising rice costs, Choudhary said. Not to mention saffron, which has gone up as well, he said.

While costs are increasing, customers are visiting the eatery less and saving money by eating in, the owner said.

"We're in a fix," Choudhary said. "It's out of our hands."

The restaurant owner said he expected the economy to turn around in late 2009 after a new president takes over the White House and implements economic reforms that will take several months to kick in.

"This is serious," Choudhary said. "People are hurting."

At the popular Los Altos Chinese eatery Chef Chu's, manager Larry Chu, Jr. said as he's facing rising prices for everything from salt to flour, he's trying to keep the restaurant as busy as possible to offset rising costs.
Like other local restauranteurs, Chu said he doesn't want to raise prices for customers.

"We'll try to fight our way through it," Chu said. "It's happened before. We know it's going to get better."


The Associated Press contributed to this report.


E-mail Melanie Carroll at mcarroll@dailynewsgroup.com.