Manila, May 9 - India said on Friday it may allow limited rice exports, a sign that a global supply crisis could start to ease, as Philippine traders held off purchases hoping for new crops soon from southeast Asia.
Despite that optimism, U.S. rice prices surged almost 5 percent as prospects of reduced output in cyclone-devastated Myanmar and a larger-than-expected purchase of rice by Malaysia raised fresh supply concerns.
India, the world's second-biggest rice exporter last year, banned shipments of all rice except the basmati variety in March, one of a series of protectionist measures worldwide that triggered a wave of panic buying.
"We are reviewing the situation and may allow limited exports," Commerce Secretary Gopal Pillai said on the sidelines of a conference in the southern city of Kochi, adding the government may also review an export tax on basmati rice.
Prices on the Chicago Board of Trade however remained stubbornly high.
"Supply worries have intensified with the Myanmar cyclone and the market is likely to continue to rise and probably test its record highs soon," said a trader in Seoul, as U.S. rice futures for July delivery rose 4.9 percent to $23.495 per hundredweight.
Rice prices had eased slightly after hitting a record of $25.07 on April 24 on prospects of increased supply from Thailand, the world's largest rice exporter.
But trade sources said the cyclone that devastated Myanmar's Irrawaddy delta last weekend destroyed thousands of tonnes of rice that were in storage and thousands of acres in the agriculturally rich region were now not plantable.
The U.N. Food and Agricultural Organisation has said it had expected Myanmar to export 600,000 tonnes of rice this year.
Malaysia bought 500,000 tonnes of rice on Thursday, which traders said showed how aggressive rice buyers are at a time when world rice stocks were shrinking and demand for the food staple was soaring.
UNEASE, UNREST
The soaring global costs of food have fuelled government unease and street unrest from Haiti to Bangladesh. The situation has exacerbated as grain exporting countries curb shipments to ensure domestic supplies and keep inflation under control.
In the Philippines, where troops have guarded sales of subsidised rice and authorities have asked restaurants to cut down on portions served, traders and officials said they expected prices to fall within a few months.
The country is the world's biggest importer of rice.
"If Thailand and Vietnam harvest earlier, as they have indicated, then there will be additional volume in the world market," said Conrad Ibanez, assistant administrator at the National Food Authority (NFA), after private traders mostly stayed away from an import tender on Friday.
"Yes, there is a possibility that prices will fall."
The private traders and groups offered to buy only 21,560 tonnes out of a total of 163,000 tonnes on offer at the tender conducted by the NFA.
"We are hoping that prices will come down," said Robert Hernandez, a private trader. "With the Philippines resorting to government-to-government negotiations to procure rice, that should dampen speculation."
President Gloria Macapagal Arroyo has personally intervened with Vietnamese Prime Minister Nguyen Tan Dung to secure up to 1.2 million tonnes of rice for this year. The government has also appealed for rice from a special fund created by East Asian nations.
The Philippines has so far bought about 1.7 million tonnes of rice for this year but has said it will need 2.2 million tonnes. NFA officials say they now have enough to meet demand and any remaining imports this year will be to boost buffer stocks, especially during a lean period in the third quarter.
Only about 30 million tonnes of rice are traded globally out of total production of about 425 million tonnes.