Manila, Oct 30 - Rice prices, which have nearly halved from record levels earlier this year, could easily spike again as the global economic downturn increases consumption, an industry expert said on Thursday.
Job layoffs and poor incomes will increase demand for rice because people who have less money to spend will turn to less expensive foods like rice, a staple for nearly half of the world's 6.6 billion population, Robert Zeigler, director general of the International Rice Research Institute (IRRI), said.
There is always a risk that the rice price crisis seen this year could see a replay in 2009, said Zeigler of the Philippines-based institute.
"When rice drops down to $600-700 a tonne, we shouldn't think the crisis is over. It's still very, very real to the people who have to pay that to survive," he told Reuters.
Benchmark Thai rice fell under $600 a tonne this week for the first time in seven months amid thin demand. The price nearly tripled to a record $1,080 a tonne in April as big producers like Vietnam and India curbed exports to secure domestic supply.
Even at current levels, rice prices are still about double the $300 a tonne seen in 2007 and Zeigler said it is unlikely that prices will fall below that.
"I don't think we will ever see prices down at $200 a tonne again, those days are gone forever."
And it doesn't help that the major rice producers impose export curbs because that only "exacerbates the situation and causes panic," he said.
Zeigler said the ongoing credit crisis would also make it difficult for governments to invest in agricultural infrastructure which is key to boosting production in the long term.
"We saw those investments were curtailed after the 1997 (Asian) financial crash so I think there's reason to be concerned about that."
Last week Southeast Asian nations supported an IRRI-proposed action plan meant to boost yields and encourage use of new technology among farmers in the region to increase production.
The institute, which breeds high-yielding strains of rice to meet rising demand, kick-started the Green Revolution in the 1970s, helping multiply harvests in Asia and enabling major producers such as China, India and Thailand to industrialise.