Rice Soars on Fears of Cyclone Blow to Output
Posted on: Wednesday, 7 May 2008, 15:00 CDT
World rice prices surged today on fears that the devastating cyclone in Burma will slash global production.
Rice for July delivery rose as much as 50 cents, or 2.4 percent, to $21.60 per 100lbs as British rice company Tilda warned that rice prices were facing a "perfect storm." The staple food for half the world's population has almost doubled in price over the past year, reaching a record $25.07 last month after China, Vietnam and India curbed exports and demand rose.
Thousands are dead and crops have been wiped out after the cyclone surged ashore in Burma's Irrawaddy delta. The fertile region is the country's rice bowl. There are now fears that Burma, once the world's top rice producer, may become a net importer. Even before the storm, production was falling as a result of inefficient systems imposed by the country's military dictators.
However, this year was expected to see a turnaround, with the United Nations Food and Agriculture Organisation predicting before the storm that Burma would export up to 600,000 tons.
Tilda, meanwhile, said that wholesale prices for basmati rice are set to remain high after doubling in the past 12 months. The company's market outlook report said: "As demand worldwide has rocketed, production has failed to keep pace. Poor harvests combined with water shortages have resulted in lower yields."
Source: Evening Standard
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