RICE CRISIS PERSISTS AS RP TENDER FALLS SHORT

RICE CRISIS PERSISTS AS RP TENDER FALLS SHORT

BANGKOK, APRIL 25, 2008 (REUTERS) The sense of crisis in the rice market showed no signs of easing Thursday, as prices continued their record climb and a tender from the Philippines, the world's top importer, attracted offers to sell only about two-thirds of the half-a-million tons it had sought.

In Bangkok, Thai 100 percent B-grade white rice, considered the world's benchmark, hit $950 per ton, free on board, three times its price at the start of 2007. U.S. rice futures, meanwhile, surged 2 percent on the Chicago Board of Trade to a record for the third straight session, reaching $23.12 per 100 pounds.

"There's been a popular misconception that the world can produce as much food as it likes," Gerry Lawson, chairman of the Australian rice company Sunrice, said. "Well, it obviously can't. And Asia can't feed itself at the moment."

Thailand is biggest exporter, accounting for nearly a third of world rice exports. Both it and Vietnam, the number two exporter, are urging farmers to plant additional crops, although it will be several months before the extra supply hits the market.

Meanwhile, demand from other big importers like Iran, which is expected to try to buy up to 1 million tons of Thai rice this year, will keep the upward pressure on prices, analysts said. Today in Business with Reuters In surprise, Ford swings to profit Microsoft tops forecast and raises outlook Credit Suisse writes off $5.3 billion

"There will be Iran, Japan and another round of tenders in the Philippines which will help boost prices," said Paka-on Tipayatanadaja, a rice market analyst at the Kasikorn Research Center in Bangkok. "I'm sure we will not see Thai rice prices at $300 a ton again."

The Philippine government received offers in its latest tender between $872.50 and $1,220 a ton, sharply higher than in March when it paid just over $700.

As a measure of the seriousness of the problem, Manila has temporarily halted conversion of agricultural land for property development, hoping to ring-fence paddy fields to meet the food needs of the country's 88 million people.

Armed soldiers stand guard during sales of subsidized rice by the state National Food Authority and the government has filed charges against 13 people suspected of hoarding.

Reported by: Sol Jose Vanzi

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