Tuesday, May 06, 2008

Myanmar May Import Rice After Cyclone; Price Rebounds

from Bloomberg

By Rattaphol Onsanit and Catherine Yang

Myanmar may be forced to import rice after crops were wiped out by a cyclone that may have killed as many as 20,000 people, potentially adding further pressure to global food supplies as prices gain. Rice futures rebounded.

``We know that the damage is huge,'' Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said today in an interview on Bloomberg Television. ``It's possible for them that they have to import,'' he said.

Rice futures rose to a record last month as some exporters, including Vietnam, curbed shipments. Cyclone Nargis, which slammed into Myanmar at the weekend, may be Southeast Asia's deadliest natural disaster since the 2004 tsunami, according to a preliminary death toll released by Myanmar's military government.

``After the cyclone, we don't know if Myanmar can export,'' Anthony S. Lam, regional general manager of rice-trading company Golden Resources Development International Ltd., said by phone from Hong Kong. ``It gives a good excuse to push the price up.''

Rice, the staple food for half the world, has surged more than 90 percent over the past year, touching a record $25.07 per 100 pounds on the Chicago Board of Trade on April 24. The most- active contract erased losses of as much as 0.8 percent today to rise as much as 1.1 percent to $21.225, gaining for a third day.

Myanmar would probably have exported about 400,000 metric tons of rice this year to try and profit from the soaring prices, compared with normal shipments of less than 100,000 tons, Chookiat said. The storm will ``jeopardize'' exports, he said.

`Hitting the Poor'

The jump in rice and energy costs has stoked concern that social unrest, poverty and hunger may spread worldwide as the poor can't afford to eat. ``Soaring food prices are hitting the poor very hard,'' Asian Development Bank President Haruhiko Kuroda told delegates yesterday at the bank's annual meeting in Madrid.

Sri Lanka and Bangladesh had agreed to import rice from Myanmar, according to Paul Risley, the Bangkok-based spokesman for the World Food Programme.

``This is the sort of storm that likely will have destroyed family and community supplies of rice and other stocks, so there will probably be a need at least over the next six months for food assistance,'' Risley said in an interview. ``The bigger issue is whether this will affect the harvest prospects for this year.''

Sri Lanka, which had agreed to buy 50,000 tons of Myanmar rice, still expected the cargo to arrive this month, Trade and Consumer Services Minister Bandula Gunawardena said in a telephone interview today. The assurance was provided yesterday by the Sri Lankan ambassador in Myanmar, Gunawardena said.

Myanmar planned to export 500,000 tons of rice this year, according to a ``tentative'' April forecast from the Food and Agriculture Organization.

`Self-Sufficient'

``Normally, they are self-sufficient'' in rice, Chookiat said from Bangkok, the Thai capital. Thailand, the world's largest rice exporter, shares a border with Myanmar, formerly known as Burma. ``We will have to wait for a while'' to know the extent of the devastation, the Thai rice group's president said.

Myanmar was forecast to export 400,000 tons of rice in 2007- 08, the U.S. Department of Agriculture said on April 9. That was double the agency's March estimate. The country was expected to produce 11.3 million tons in the current year, up from 10.6 million tons the year before, the USDA said.

Death Toll

The death toll from the disaster ranges ``anywhere from 10,000 to 20,000,'' according to Pamela Sitko, a Bangkok-based worker with the Christian relief group World Vision, citing state radio reports. The official New Light of Myanmar newspaper put the toll at 15,000, Agence France-Presse reported.

About 3,000 people are missing in the Irrawaddy delta region alone, an important rice-growing area, government ministers told diplomats yesterday, according to United Nations news agency IRIN. Power was knocked out in the former capital, Yangon, and drinking water was contaminated in the city of 5 million people.

``The lessons learned from the tsunami of 2004 certainly have given us a wake-up call, and has triggered a sense of urgency,'' Surin Pitsuwan, secretary-general of the Association of Southeast Asian Nations, told reporters today in Singapore. ``We cannot be complacent any longer about this kind of disaster.''

Cyclone Nargis packed winds of 120 miles (190 kilometers) per hour when it struck the coast May 3, sending the sea surging as much 12 feet (3.5 meters). The government declared a state of emergency in five low-lying provinces, mostly in the Irrawaddy delta, where villages were flattened by winds and rain, the UN said. Myanmar has a population of 47.8 million.

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