Cyclone Cuts Myanmar's Rice Production

The storm's devastation may increase already-high food prices globally.

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With high food prices already wreaking havoc around the globe, Cyclone Nargis likely depleted the late-year crop in the region that provides one third of the rice for Myanmar's 47 million people, the U.S. Department of Agriculture said this morning. The slow response by Myanmars military regime to the immediate humanitarian disaster has captured headlines, overshadowing experts' concerns that the damage to the nation's rice output will compound the hardship in Myanmar and further raise rice prices globally.

USDA said its "very tentative" projection was that Myanmar's production would be down 7 percent for the 2008-2009 harvest, but it had yet to assess the full impact of the delay in planting, the impact on seed availability and salt intrusion into the rice paddies of the Irrawaddy Delta, the region devastated by the violent storm.

If that figure holds true in a region that produces one third of the country's 10 million tons of rice, global rice production is projected to reach a record 432 million tons, up about 1 percent over last year—just keeping pace with record demand of 428 million tons, USDA said in its monthly World Agricultural Supply and Demand Estimates.

The storm likely damaged the recent dry-season crop, although most of that grain probably had already been harvested. The real impact will be on the harvest that normally begins in December; Myanmar's farmers had been in the early stages of planting when the deadly cyclone hit.

Among the concerns are seed availability for the larger rainy-season crop and whether the salt damage to the rice paddies will lower yields or prevent plantings altogether. It is not clear how much the Myanmar situation would affect world rice prices or supply, since in the 2006-2007 growing season the regime exported less than 1 percent of its rice crop. Historically, it has imported none.

However, Myanmar's rice exports had been expected to grow to 4 percent of production in the 2007-2008 season amid high global prices.

USDA estimated that the average price for U.S. rice in the 2008-2009 growing year would be a record $18.50 to $19.50 per hundredweight, up as much as 48 percent over last year.

—Marianne Lavelle