Kuala Lumpur, May 15 - Cyclone damage to Myanmar's rice crop could stir up prices, which have shown signs of easing after forecasts of a record global crop calmed nervous markets.
The Food and Agriculture Organization (FAO) said cyclone Nargis damaged 20 percent of rice paddy in Myanmar's five disaster areas, compared with 7 percent losses estimated by the the U.S. Department of Agriculture (USDA).
"About 20 percent of the rice fields have been damaged," FAO regional chief He Changchui told Reuters, adding farmers had about 50 days to plant their next rice crop.
"There is not much time. The planting season has started already. We need to have the funds and resources to bring the farmers back," He Changchui told Reuters in an interview.
Traders said news of further damage to Myanmar's rice crop could be bullish for the rice markets.
"This means things are going to be difficult," said Atul Chaturvedi, chief executive of Indian trading firm Adani Exports. "Myanmar was exporting rice before the cyclone and this means they will be be out of the market."
Rice prices have trebled this year with world stocks at their lowest since the early 1980s and demand strong.
The crisis over soaring food costs and supplies has sparked riots in Africa and toppled Haiti's government. Although Asia consumes nearly 90 percent of the world's rice, the impact has been limited as countries, such as China, India and Japan, are self-sufficient.
U.S. July rice futures dropped more than 3 percent in Asian trading on Thursday, after falling by the same margin overnight as worries eased over the world's supply of rice.
U.S. rice prices have been falling all week, with the July contract down 9 percent from Friday's close, after the U.S. Department of Agriculture forecast a record world rice crop for 2008 and said stocks would grow. [ID:nSP136885].
END TO PANIC?
In India, the world's biggest rice exporter after Thailand, traders said early monsoon rains could boost its rice output, easing panic in the market that had prompted a ban on exports.
"It is a superb news. The whole panic of rice shortage will end," said Anil K Mittal, chairman and managing director of KRBL Ltd, a leading rice exporter.
Farmers in India depend heavily on monsoon rains as only 40 percent of cultivable land is irrigated.
But Asian nations, such as Vietnam, Thailand and Malaysia, remain concerned about domestic supplies.
Malaysia's farm minister said the country's rice imports will jump almost a third to 900,000 tonnes this year, as the government steps up efforts to boost reserves and rein in inflation to stave off social tensions.
The government will also unveil two programmes next month to increase food supplies to maintain reasonable and stable prices, Mustapa Mohamed said in the Malaysian capital, Kuala Lumpur.
Malaysia this week bought 200,000 tonnes of Thai rice and is in talks to secure another 300,000 tonnes, a Thai official said on Tuesday.
Malaysia has not witnessed any street protests or social unrest, but spiralling food prices pose a risk to the government already struggling to bolster its flagging popularity after surprise election setback.
Thailand said it will buy paddy directly from farmers at 14,000 baht ($432) a tonne to prop up domestic prices, after protests last week by farmers who blamed the government for falling domestic prices ahead of more supply coming onto the market by June.
The domestic price of Thai 100 percent white paddy rice surged to 12,000-13,000 baht per tonne after the announcement, up from around 9,000 baht per tonne last week, traders said.
In Vietnam, rice consumption will grow 1 percent annually until 2020, meaning exports will shrink even as output of the grain jumps, an Agriculture Ministry report forecasts.
Exports will be 4.4 million tonnes by 2010, and slip to 3.8 million tonnes in 2020, according to the report, quoted in the Labour Union-run Lao Dong newspaper on Thursday.
This year the government has set an export target of 3.5-4.0 million tonnes, after shipping 4.5 million tonnes the year before.