RAWALPINDI, May 12: Rice prices have skyrocketed by around 76 per cent between December 2007 and April 2008, according to the ‘Rice Price Index’, released by the United Nations Food and Agriculture Organisation (FAO) on Monday.

International rice prices are expected to remain at relatively high levels, as stocks held by exporters are expected to be reduced heavily. In addition, other large importers will probably return to the international market to buy rice, including Iran, Saudi Arabia, Nigeria and Senegal. Prices are expected to remain extremely firm, at least until the third quarter of 2008, unless restrictions on exports are eased in the coming months, said the rice index.

In an attempt to avoid food scarcities in their own countries, major rice exporters have recently imposed export bans, taxes or minimum ceilings. “These measures further restricted the availability of rice supplies on international markets, triggering yet more price rises and tighter supply conditions.”

At the moment, only Thailand, Pakistan and the United States are exporting rice without any constraints. Auctions by the Philippines to import massive volumes of rice have also contributed to record rice prices, it said.

For prices to fall, favourable weather conditions must prevail in the coming months and governments relax rice export restrictions. Even then, rice prices are unlikely to return to the levels of 2007, as producers have to pay much more for their fertilisers, pesticides and fuel.

Export restrictions will influence trade in rice, estimated to reach 28.8 million metric tons in 2008, around 7 per cent or 2.2 million tons lower than the 2007 record level.

Average world rice consumption per person is set to increase by 0.5 per cent to 57.3 kilo per year, up from 57 kilo in 2007. Despite high rice prices, consumers seem to shift away from more expensive foods, in particular meat and meat products.

The sudden surge in world rice prices has shed some light on major medium term constraints that have been often ignored in the past two decades, such as low investment in agriculture, especially irrigation, reduced funding for agricultural research, environmental problems, stagnating productivity and migration from rural areas to the cities.

Rice production in Asia, Africa and Latin America is forecast to reach a new record level in 2008, the UN body said, warning that world rice prices could remain high in the short term, as much of the 2008 crops will only be harvested by the end of the year.

The FAO preliminary forecasts say world paddy production 2008 could grow by about 2.3 per cent reaching a new record level of 666 million tones. Production growth could even be higher if recent appeals and incentives to grow more rice lead to a larger expansion of plantings, it says.

The destruction of Myanmar’s food basket may sharply decrease national rice production and impair access to food, according to first FAO estimates. The cyclone damage could worsen the current global rice production outlook.

For the first time, paddy production in Asia may surpass the 600 million tons benchmark this year, amounting to 605 million tons. Major gains are expected all across the region. Bangladesh, China, the Philippines, Thailand and Vietnam could register the largest gains. Prospects are also buoyant for Indonesia and Sri Lanka, despite some recent flood-incurred losses.