Cyclone damage to Myanmar rice may flare prices

By Naveen Thukral

KUALA LUMPUR (Reuters) - Cyclone damage to Myanmar's rice crop could stir up prices, which have shown signs of easing after forecasts of a record global crop calmed nervous markets.

The Food and Agriculture Organization (FAO) said cyclone Nargis damaged 20 percent of rice paddy in Myanmar's five disaster areas, compared with 7 percent losses estimated by the U.S. Department of Agriculture (USDA).

"About 20 percent of the rice fields have been damaged," FAO regional chief He Changchui told Reuters, adding farmers had about 50 days to plant their next rice crop.

"There is not much time. The planting season has started already. We need to have the funds and resources to bring the farmers back," He Changchui told Reuters in an interview.

Traders said news of further damage to Myanmar's rice crop could be bullish for the rice markets.

"This means things are going to be difficult," said Atul Chaturvedi, chief executive of Indian trading firm Adani Exports. "Myanmar was exporting rice before the cyclone and this means they will be out of the market."

Rice prices have trebled this year with world stocks at their lowest since the early 1980s and demand strong.

The crisis over soaring food costs and supplies has sparked riots in Africa and toppled Haiti's government. Although Asia consumes nearly 90 percent of the world's rice, the impact has been limited as countries, such as China, India and Japan, are self-sufficient.