FAO says 2008 rice output to climb in Asia, Africa, Latin America
Posted: 12 May 2008 1933 hrs

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ROME - Rice production in Asia, Africa and Latin America is forecast to reach a new record level in 2008, but world rice prices could remain high in the short term, the UN Food and Agriculture Organisation (FAO) said Monday.

However the destruction of Myanmar's food resources by a deadly cyclone could decrease national rice production and impair access to food, according to first FAO estimates.

"World paddy production 2008 could grow by about 2.3 percent, reaching a new record level of 666 million tonnes, according to our preliminary forecasts," said FAO rice expert Concepcion Calpe.

Production growth could even be higher if recent appeals and incentives to grow more rice lead to expansion, according to the Rice Market Monitor.

But the May 3 cyclone disaster in Myanmar could well worsen the forecast,say FAO officials.

"The cyclone damage could worsen the current global rice production outlook," said an FAO statement.

"The cyclone struck when paddy farmers were harvesting their dry season crop accounting for 20 percent of annual production.

"Entire rice-growing areas are flooded and many roads and bridges are impassable. Several rice warehouses and stocks were destroyed. Rice prices in Rangoon (Yangon) have already surged by nearly 50 percent."

"Myanmar may need to turn to neighbouring countries, such as Thailand and Vietnam for rice imports," the FAO said: "This could lead to further pressure on world prices."

For the first time, paddy production in Asia could surpass the 600 million tonne benchmark this year, amounting to 605 million tonnes, Calpe was quoted as saying.

"Major gains are expected all across the region," she said. "Bangladesh, China, the Philippines, Thailand and Vietnam could register the largest gains. Prospects are also buoyant for Indonesia and Sri Lanka, despite some recent flood-incurred losses."

Assuming normal rains in the coming months, rice production in Africa is forecast to grow by 3.6 percent to 23.2 million tonnes in 2008.

Paddy production in Latin America and the Caribbean was expected to rebound by 7.4 percent to 26.2 million tonnes.

Rice prices have skyrocketed by around 76 percent between last December and April, according to the FAO Rice Price Index.

International rice prices were expected to remain at relatively high levels, as stocks held by exporters are expected to be reduced heavily.

To avoid food scarcities in their own countries, major rice exporters have imposed export bans, taxes or minimum ceilings, the agency noted.

These measures further restricted the availability of supplies on international markets, triggering yet more price rises and tighter supply conditions.

For prices to fall, favourable weather conditions must prevail in coming months and governments relax rice export restrictions, the FAO said.

Even then, rice prices are unlikely to return to the levels of 2007, as producers have to pay much more for their fertilisers, pesticides and fuel. - AFP/ir