U.S. sees record world food crops easing crisis
WASHINGTON (Reuters) - Good weather will help the world's farmers reap record wheat and rice crops this year, the U.S. government said on Friday, which should allay fears of shortages and help bring prices down from current high levels.
The U.S. Agriculture Department also forecast a record global crop of feed grain, used to feed livestock.
The USDA announcement was expected to calm fears of food shortages, worsened by the cyclone that hit Myanmar's rich rice-producing Irrawaddy delta last week, and by a larger than expected 500,000 metric ton Malaysian rice purchase on Thursday.
Disappointing harvests, the boom in biofuels and higher meat consumption have pushed up grain prices in the past two years, raising food prices and sparking protests in some 40 poorer countries whose people have felt the effect most strongly.
Officials at the U.N. Human Rights Council said it would hold a special session on May 23 to assess the effect of the food crisis on the right to food of millions of people suffering from high prices, notably in sub-Saharan Africa and South Asia.
"We're keeping our fingers crossed that we get good harvests this year ... and that it brings prices down some from their high peaks," said analyst David Orden of the International Food Policy Research Institute, a think tank.
Even with bountiful crops, Orden said, larger international food aid efforts would be vital because prices would be higher than usual for the next couple of years at least.
The USDA said the world wheat crop would rise 8 percent to a record 656 million metric tons in 2008/09. It projected global rice output at a record 432 million metric tons, up 5 million metric tons from 2007/08.
"This ought to take the edge off commodity prices" said private U.S. consultant John Schnittker, making it easier for poor people to buy enough food.
Other signals that the supply crisis might be easing came from India, which said on Friday that it might allow limited rice exports, and from the Philippines, where traders held off purchases hoping for new crops soon from southeast Asia.
India, the world's second-biggest rice exporter last year, banned shipments of all rice except basmati in March, one of a series of protectionist measures worldwide that triggered a wave of panic buying.
"We are reviewing the situation and may allow limited exports," Commerce Secretary Gopal Pillai said on the sidelines of a conference in Kochi, adding that the government might also review an export tax on basmati rice.
The USDA forecast depressed wheat prices on the Chicago Board of Trade, but rice prices rose on the USDA prediction that Cyclone Nargis would reduce Myanmar's rice crop by 7 percent. The U.N. Food and Agriculture Organisation had said it expected Myanmar to export 600,000 metric tons of rice this year.
The soaring cost of food has fuelled unease among governments and street protests from Haiti to Bangladesh. The situation has worsened as grain exporting nations curb shipments to ensure domestic supplies and keep inflation under control.
The Philippines, the world's biggest rice importer, has so far bought about 1.7 million metric tons of the 2.2 million metric tons of rice it needs this year, and officials and traders said they expected prices to fall within a few months.
The USDA said the record harvests expected this year meant there would be an end-year world wheat surplus of 124 million metric tons, despite a rise in consumption of 3.5 percent.
The higher rice crop would leave a stockpile of 82.6 million metric tons, the largest in six years, it said.
(Additional reporting by Rosemarie Francisco in Manila, Debiprasad Nayak in Kochi)
(Writing by Tim Pearce)