food shortage fears after deadly cyclone

BANGKOK - The cyclone that tore through Myanmar's Irrawaddy delta could turn the country from an exporter of rice to an importer, the UN's food agency said yesterday.

BANGKOK - The cyclone that tore through Myanmar's Irrawaddy delta could turn the country from an exporter of rice to an importer, the UN's food agency said yesterday.

Rice prices have retreated from the record levels they reached last month, but the US futures market rose more than 2percent amid concerns that the storm in Myanmar, which killed at least 22500 people, could put a fresh squeeze on supplies.

Soaring food costs, called a "silent tsunami" by the World Food Programme, have fuelled unrest from Haiti to Bangladesh and exporting countries have curbed shipments to ensure domestic supplies and keep inflation under control.

Bangladesh said yesterday it had banned exports of non-aromatic rice for six months to secure domestic supplies.

Export bans by India and Vietnam, in addition to dwindling world stocks, have helped rice prices in Asia to treble this year, ringing alarm bells for policy makers struggling to rein-in surging inflation, which has raised fears of social unrest.

"On top of record oil prices and a weaker US dollar, renewed supply worries and fears of fresh export curbs by major rice exporters are providing some support for the grain," said a trader at Samsung Futures.

The UN's Food and Agriculture Organization (FAO) said the storm damage to Myanmar's rice bowl Irrawaddy delta could scupper plans by the Southeast Asian country to export 600000 tons of milled rice this year, and force it to import from neighbours instead.

"If post-harvest losses turn out being large, localised food shortages in the short term might result," the FAO said.

"Such losses could also impair the country's ability and government decision to export rice this year."

The FAO said the 2007 output estimate of 30,02 million tons of paddy could be revised down once the extent of the damage was known.

The storm, which battered five states accounting for 65 percent of the former Burma's rice output, could trigger "localised food shortages" and require imports from neighbours, it said.

Myanmar's junta insists it has enough rice stocks to keep people fed, but the price of small bags have doubled since the cyclone tore through the fertile delta at the weekend.

Thai rice prices eased around 10 percent earlier this week from a record level above R7000 a ton after the Philippines scrapped a tender to import 675000 tons. - Reuters

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