Wednesday, May 7, 2008

Rice Prices

Myanmar Hurricane

Rice advanced for a fourth day on speculation that Myanmar may be forced to scrap exports and buy on the international market after a cyclone at the weekend devastated crops and killed as many as 60,000 people.

Rice for July delivery rose as much as 50 cents, or 2.4 percent, to $21.60 per 100 pounds on the Chicago Board of Trade. The Philippines, the world's biggest rice importer, will seek shipments ``aggressively'' as global supplies tighten, Agriculture Secretary Arthur Yap said.

Cyclone Nargis struck the main rice-growing area of Myanmar, worsening a food crisis that threatens as many as 1 billion Asians. The staple food for half the world has almost doubled in the past year, stoking protests and poverty from Haiti to the Philippines.

Before the storm, the Food and Agriculture Organization had estimated that Myanmar may have exported 600,000 metric tons of rice this year, with shipments set for Sri Lanka and Bangladesh. That compares with estimated global exports this year of 29.9 million tons, according to the Rome-based United Nations agency.

The storm whipped up 12-foot (3.66 meter) waves that inundated low-lying regions of the Irrawaddy delta, Ken Reeves, director of forecasting operations for, said in a statement. ``Sea-water reached 10 miles (16 kilometers) inland.''

The delta ``is the country's main rice-growing region,'' John Sparrow, a spokesman for the International Federation of Red Cross and Red Crescent Societies, said in a statement dated yesterday. ``Roughly 24 million people live there.''

The Philippines canceled a tender for 675,000 tons of rice this week because of a lack of offers. The government has said it may seek fresh supplies to boost stockpiles in the second half when prices may have declined.

The Philippines needs between 500,000 and 700,000 tons of rice to boost national stockpiles, National Food Authority Administrator Jessup Navarro told reporters in Manila today, with supplies from local farmers and overseas suppliers.

The damage from the cyclone was ``huge'' and Myanmar may be forced to seek imports of rice, Chookiat Ophaswongse, the president of the Thai Rice Exporters Association, said yesterday.

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