Rice gained for a fifth day as the extent of the devastation in Myanmar from a cyclone became clearer with as many as 100,000 people dead, and Malaysia agreed to purchase the grain from Thailand, the world's biggest exporter.
Rice futures, which touched a record last month, rose as much as 3.5 percent to $22.35 per 100 pounds on the Chicago Board of Trade. Cyclone Nargis left 5,000 square kilometers of Myanmar's Irrawaddy delta underwater, Unicef said.
The storm struck the country's main rice-growing area on May 3, worsening a food crisis that's triggered unrest from Haiti to Egypt.
Surging food costs have raised the risk of malnutrition for 1 billion Asians, according to the Asian Development Bank as wheat, corn and soybeans have risen to records this year.
"The crop damage in Myanmar has fueled concern over tight global supplies and prompted importers to rush for the grain," Hiroyuki Kikukawa, general manager of the research department at IDO Securities Co, said yesterday in Tokyo.
"Any supply disruptions may stoke panic buying."
Thailand will sell 500,000 metric tons to Malaysia as the neighboring country has a limited supply, Thai government spokesman Wichianchote Sukchotrat told reporters, saying the sale had been agreed to by Thai Prime Minister Samak Sundaravej. The shipment will be sold at market prices, Wichianchote said yesterday.
Myanmar had been expected to export 600,000 metric tons of rice this year, including to Sri Lanka and Bangladesh, according to the Food and Agriculture Organization. The Rome-based United Nations agency had forecast world exports at 29.9 million tons.
Net importer
If Myanmar becomes a net importer it "will seriously affect the prices of rice globally", Anthony Lam, regional general manager at Golden Resources Development International Ltd, said yesterday.
The Chicago rice contract, which touched a record $25.07 per 100 pounds on April 24, has gained as much as 8.3 percent since May 1.
The benchmark export price of Thai 100 percent grade B white rice gained 10 percent to a record $941 a metric ton this week, according to the Thai Rice Exporters Association.
The Philippines, the world's biggest rice importer, will seek shipments "aggressively" after the disaster in Myanmar, according to Agriculture Secretary Arthur Yap.
"Taking a cue from what happened to Myanmar, we have reports that rice demand is spiking," Yap said.
Source:China Daily/Agencies
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