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May 12, 2008 - Image 3

Resource type:
Michigan Daily Summer Weekly, 2008-05-12

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Monday, May 12, 2008
The Michigan Daily - michigandaily.com


Rising rice prices hurt A2 businesses

Local restaurants ly 40 pounds of Basmati rice that
his restaurant cooks up every week.
struggle but 'U' The EarthenJarservesmostlyIndi-
an cuisine, and Sethi said he used to
dining safe for now go to places like Sam's Club to stock
up on rice. Recently, though, he's
By LINDY STEVENS had to turn to local shops because
Daily StaffReporter larger wholesalers don't have what
he needs.
While rice piles on plates for mil- Sethi also said the switch has
lions around the world everyday, meant paying prices that are two to
prices for the food staple in the three times higher than those from
United States have skyrocketed in a year ago.
the past year, hitting an all-time "Sam's Club used to have a 20-
high about two weeks ago and caus- pound bag that was $10," Sethi said.
ing concern for some Ann Arbor "Now I'm paying $20 to $25 for the
eateries. same 20-pound bag."
Rice that traded for $10.66 per Despite the financial hit his fam-
100 pounds in May 2007 was trad- ily-owned business has taken in the
ing for record-breaking $25.07 past year, Sethi said he was afraid
on the floor of higher prices
the Chicago could drive
Board of Trade "We're afraid to away potential
as of April customers in the
24th. Though raise the price, but midst of a strug-
the price has , gling state econ-
declinedslightly we don't really have gmy. He said
since then, clos- a choice right now." he'll keep the
ing at $22.35 per prices steady for
100 pounds on now, in the hope
Thursday, the they go back
recent price shock has led whole- down in a couple of months.
salers like Sam's Club to take dras- "I'll eventually have to increase
tic measures. the prices because everyone around
In response to record pric- me is raising their prices," he said.
ing, Sam's Club announced that it Though state-level conditions
would limit customers to four 20- seem to direct local business own-
pound bags of rice per visit. For the ers like Sethi, University Economics
average American, who consumes Prof. Alan Deardorff said a grow-
about 24 pounds of rice every year, ing world economy is really what's
according to the USA Rice Federa- behind increasing rice prices.
tion, the 80-pound limit shouldn't Increasing incomes in develop-
pose a problem. ing nations mean that the world
ButthenewlimitshaveleftPush- is consuming more food than ever
pinder Sethi, owner of the Earthen before, he said. It also means that
Jar restaurant in Ann Arbor, look- citizens of those nations can now
ing for other places to find the near- afford to buy food that they previ-

As rice steams in the kitchen of Asian Legend, the restaurant's owner, Kevin Lo, said the increased cost of rice his forced him to
choose between raising the price of rice or limiting the amount a customer can get. Currently, patrons are limited to two bowls.

From page 1
contract expires, both University
Unions and restaurant manage-
ment decide if they are interested in
renewing it for an additional three
Magic Wok and Villa Pizza,
whose five-year contracts expired
April 30, didn't apply for contract
renewal because of poor sales and
M negative student feedback, Taylor
University Unions sent a sur-
vey to students via e-mail last fall,
which asked them to rate their
experience with the restaurants in
the Union and League. The surveys
also allowed students to suggest

potential fast food eateries.
"In these cases, from a student
survey as well as the sales that they
were making in comparison to our
other operators, they weren't look-
ing to be as successful," Taylor said.
"And students were interested in
some different choices for some dif-
ferent quality."
LSA junior Ari Goldstein said,
he looks forward to the change. He
said he used to visit Pierpont Com-
mons on-North Campus just to eat at
Panda Express, so he's glad that the
restaurant is opening a location in
the Union. He said he was especially
pleased to see Magic Wok go.
"Magic Wok sucked," Goldstein
said. "They'd take the same fried
chicken and pour a different sauce
over it and call it a different name."

ously couldn't.
"What's particularlythe problem
with this is not that that people are
eating so much more rice," Dear-
dorff said. "But people in previous-
ly poor countries are now affording
to eat more meat, which uses far
more grain than it does if we eat it
Deardorff said demand for com-
modities like rice and corn have
outpaced supply in recent years
and that this permanent shift in the
world market means.higher prices
are probably here to stay.
Eric Kung, owner of Ann Arbor
Chinese restaurant Emerald City,
Large chain restaurantslike Wen-
dy'sandSubwayhavedone extreme-
ly well at the Union. According to
Subway manager Jeremy Nofzinger,
the sandwich chain's Union location
is the most successful in the state.
The Michigan Union Board of
Representatives began considering
potential replacements for Magic
Wok and Villa Pizza in February,
said Michigan Student Assembly
President Sabrina Shingwani, a
member of MUBR.
During the review process,
MUBR members sampled food and
reviewed market figures, contract
proposals and menu options from
a number of local Chinese restau-
rants and pizza vendors. She said
Domino's Pizza and Panda Express
stood out as the most likely candi-

said the increase in rice prices over
the pastyear have made him rethink
the way he runs his restaurant.
Serving over 600 pounds of rice
every week, Kung said his restau-
rant used to give customers long-
grain white rice with their meals at
no extra charge.
But now that his rice supplier,
food distribution giant Sysco Cor-
poration, has raised prices and
tacked on a $7 fuel charge for deliv-
ery, Kung said he's not sure if (he
complementary side dish will still
be free.
"We're afraid to raise the price,
but we don't really have a choice
dates from the beginning.
"Because we had such a great
experience with Panda at Pierpont
Commons, we were pretty much
leaning toward Panda," she said.
Shingwani said Domino's Pizza
seemed especially well-suited to the
Union because it was willing to sell
whole pizzas, which could be useful
for the many student organizations
that meet there. Domino's Pizza has
also been a longtime sponsor of Uni-
versity student groups like the Resi-
dence Halls Association and MSA,
she said.
Because the League has its own
governing body, Shingwani said
there was no direct student input in
selecting Benici Brothers' replace-
"With Taco Bell specifically,

right now," Kung said. "It's already
a low profit margin, and when the
prices increase, there's no profit left
at all."
Though he said rice prices have
hurt his business, Kung said he felt
lucky just to be open. He added that
many of his neighboring competi-
tors have closed their doors in the
past year.
Sysco also supplies rice to Uni-
versity dining halls, but Kathy
Whiteside, who is the housing
menu systems manager, said higher
prices haven't changed the way the
University does business.
See RICE, Page 8
(University Unions) really didn't
need any student input to decide
whether or not they wanted them
to come because every survey that
they do, students are just like 'Taco
Bell, please!"' Shingwani said.
Work for
Daily News
E-mail Julie Row at rowe@
Please report any error in the
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