Rice prices may calm but action still needed: expert

By Carmel Crimmins

MANILA (Reuters) - Galloping world rice prices should start to calm in the next month as fresh crops hit markets, but they will not return to 2007 levels anytime soon due to soaring production costs and rising demand, a top expert said.

Consumers from Bangkok to Tehran have been experiencing the worst leaps in the food staple's price since the early 1970s, when OPEC's oil squeeze sent rice prices shooting up to $1,300-1,400 a tonne, in inflation-adjusted terms.

Thai 100 percent B grade white rice, considered the world's benchmark, is around $950 per tonne, triple its price at the start of 2007, as major exporting nations curb shipments to keep a lid on domestic inflation and importers scour for supply.

"My guess would be we will start to see it stabilize in another month or so," Robert Zeigler, director general of the Philippines-based International Rice Research Institute (IRRI), told Reuters in a telephone interview on Friday.

"We will hit a peak and it will drop pretty quickly but not anywhere near $300 a tonne."

At the time of the 1970s crunch, IRRI came to the rescue with the Green Revolution: the development of high-yielding rice seeds that multiplied harvests of Asia's food staple and enabled major producers such as China, India and Thailand to industrialize.

To achieve a second breakthrough, Zeigler warned urgent action was needed by governments and international agencies to boost rice yields and improve poor people's access to a grain that feeds half the planet's 6.6 billion strong population.

MARKET FORCES NOT ENOUGH