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Rice shortage reaches House of Commons

House of Commons discusses the issue of shortage and rising prices of rice that is a cause of worry for the Indian restaurant industry in UK.

india Updated: May 05, 2008 08:56 IST

Growing unease in the Indian restaurant industry over the shortage and rising prices of basmati rice has reached the House of Commons with an early day motion condemning the European Union for imposing tariffs on the grain.

Philip Davies, Conservative MP from Shipley, north England, tabled the motion following several complaints by Indian restaurant owners in his constituency as well as in Bradford.

The early day motion titled 'Basmati Rice' reads: "That this House is concerned about the rising cost of rice which is causing problems for many South Asian restaurants and takeaways; condemns the EU for imposing tariffs of up to 65 euros per ton on basmati rice from Thailand, Egypt, Uruguay and the US; believes in the principle of free trade; and therefore calls on the Government to regain trade policy from the EU and abolish these tariffs for the benefit of these restaurants, takeaways and the customers they serve".

"These trade tariffs are totally unjustified. They are pushing up the prices for consumers, causing problems for our local restaurants and takeaways across Bradford and also hinder some of the poorest countries in the world from trading their way out of poverty," Davies said.

He said that the trade tariffs were another prime example of how the EU had allegedly become a "protection racket for inefficient producers".

The UK imports around 200,000 tonnes of rice every year and is the largest importer of rice in the EU.

The shortage of basmati rice and rising prices have prompted shopkeepers in several towns across Britain to ration sales to prevent hoarding and panic buying. The shopkeepers say they are struggling to procure supplies to meet demand.

There are also cases of people hoarding rice bags to sell them at a premium later as prices rise.

Alex Waugh, director of the Rice Association, said prices were up 60 per cent since the last year and the price of basmati rice, one of the most popular varieties in the UK, had almost doubled.

Big producers like India and China had restricted their exports and there were now "rapidly declining stocks" in the world, he said. This has raised prices that British consumers pay for rice at shops and in restaurants.

According to the Rice Association, the strengthening Indian rupee has increased sterling import costs by more than 10 per cent between August 2006 and January 2008.

P&B Foods, a Bradford-based food importer and wholesaler which sells about 5,000 tonnes of rice every year, is now rationing customers to ten 45 kilo bags.

Chandra Patel, the company's buying director, warned the situation could get worse.

"The supplies are not coming out of India, Pakistan and other countries," he said, adding "There's a lot of panic buying going on, which only makes the situation worse. We need to improve the supply but there's not much we can do - just wait and hope."

Seafresh Foods, another Bradford-based wholesaler, said for the moment it was not placing any limits on the amount of rice customers could buy.