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UN Experts: Too Soon to Tell Cyclone's Effect on Rice Prices (DJ)

Source: Dow Jones Newswires
07/05/2008

Rome, May 6 - U.N. experts said Tuesday that it is unclear how the cyclone that hit Myanmar on Saturday will affect world prices for rice.

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Myanmar, where vast rice-growing areas were wiped out by the disaster, had been expected to greatly increase exports of the food staple this year.

In recent years, Myanmar has been a small player among the world's rice exporting countries.

In 2004, it exported 114,000 tons; last year, only 40,000 tons were exported because Myanmar's government "restricts imports considerably," said Concepcion Calpe, a rice commodity expert at the U.N. Food and Agriculture Organization.

But "in 2008 we were expecting 600,000 tons because they relaxed the restrictions," Calpe said. "If they do not export, it (the rice market) will be tighter," she said.

Calpe said it was much too soon to say how the cyclone's impact on the rice crop might affect prices.

"We have no idea what the losses are," she said.

The World Food Program, another Rome-based U.N. agency, said Tuesday that preliminary reports from assessment teams indicate "tremendous storm damage" in the rice-cultivating areas of the coastal region.

The cyclone, which battered the country last weekend, caused at least 22,000 deaths.

In early April, Calpe, a senior economist at the Rome-based organization, had described the international rice market as facing a particularly difficult situation, with demand outstripping supply and substantial price increases.

Last month, the Food and Agriculture Organization said that international trade in rice in 2008 was predicted to reach 29.9 million tons. Most of the worldwide 650 million tons of paddy production is consumed in home countries.

The Food and Agriculture Organization said that, based on the crop calendar, the cyclone affected 2007 secondary crops - those normally harvested between April and June and said a proper assessment had not yet been carried out.

The organization had estimated 2007 production for Myanmar at 30 tons, a 2% drop from the previous year's production. Now that could change.

"The cyclone may require the 2007 estimate to be downgraded somewhat once the extent of the damage is better known," the agency said.



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