Asia's food security hinges on rice grower India

Rising rice prices and possible shortages in the world's poorest
countries will hinge on what major growers India, China and Thailand do
to make up for millions of tons of the staple lost to floods and
droughts, officials said Thursday.

All eyes are on India, traditionally one of the world's top rice
exporters, which may import 1.1 million tons (1 million metric tons) to
3.8 million tons (3.5 million metric tons) next year to replace
production losses after a drought ravaged the country's rice bowl.

"Just the fact that India has significantly reduced production alone is
a significant development given the tightness of supplies that we see in
the world today," said Jim Guinn, vice president of USA Rice Federation.

"But the fact that they may actually be an importer is of even more
importance," he said.

India's return to the import market is viewed as pushing up the price of
benchmark Thai 100 percent Grade B rice, which this month traded at $530
per ton (metric ton), though still down from more than $1,000 at the
height of last year's food crisis.

Robert Papanos, a trader from Seacor Commodity Trading LLC, told an
international rice conference in the Philippines that prices were bound
to rise because India was unlikely to return as a top exporter for three
to five years due to recent blows to its rice production, pressures to
increase food supply for its booming population, lack of land and
problems with water.

"It means that supply for world trade loses roughly 4 million tons," he
said, adding that that allows top exporters Thailand and Vietnam to
"drive the car" and influence prices.

India will import rice next year, or threaten to, not because of trade
reasons but domestic politics, he added.

But Papanos warned of higher unpredictability in the market because of
weather anomalies, new political interference by governments, and rising
costs of crude oil and farm inputs.

Guinn said other factors that could influence prices include whether
China will export or not, and if Thailand releases its bumper stocks.
China holds half the world's rice stocks and has been exporting on-and-off.

"The circumstances are there certainly for another panic in the
marketplace," Dwight Roberts, president and CEO of U.S. Rice Producers
Association, told The Associated Press.

India's possible shift to wheat consumption may not be enough to stop
the country from importing, Roberts said.

"In Asia, if you don't eat rice, you don't eat," he said. "Rice here is
a religion as much as a food product."

The 2008 rice crisis demonstrated that the crop "is a very political
commodity," Roberts said.

Last year's record-high price of rice and other staples led to riots in
at least 30 countries, according to the World Food Program. The biggest
producers, Thailand, Vietnam and India, had curbed exports to protect
domestic supply. In the Philippines, people queued to buy low-quality
rice at subsidized prices while traders were suspected of hoarding.

Philippine Agriculture Secretary Arthur Yap said Wednesday that any rice
crisis similar to last year's would hurt developing countries like his,
the world's top rice importer.

The Philippines says it has lost at least 925,000 tons (840,000 metric
tons) due to recent back-to-back storms.