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Philippines May Lose 600,000 Tons Rice From Typhoon (Update1)
2010-10-18 05:06:42.147 GMT
(Adds agriculture official's comment in second paragraph.)
By Luzi Ann Javier
Oct. 18 (Bloomberg) -- The Philippines, the world's biggest
rice buyer, may lose 600,000 metric tons of the crop as
Supertyphoon Megi, the strongest to hit the nation this year,
strikes some of the nation's biggest producing areas, a
government official said. Rice futures advanced.
"Once the typhoon hits those areas, the crop will be
affected," Agriculture Undersecretary Antonio Fleta said in a
phone interview from Manila. "Even if farmers harvest the
damaged rice, they'd have a hard time drying the grain. There
may not be much left to sell."
About 157,000 hectares of land planted to rice in Cagayan
and Isabela provinces may be in the path of the typhoon, Fleta
said. Megi has sustained winds of 270 kilometers (168 miles) per
hour, the U.S. Navy Joint Typhoon Warning Center said, making it
a Category 5 storm capable of catastrophic damage.
Half of the planted areas in the two provinces are ready
for harvest and the rest are in the reproductive stage, leaving
them susceptible to damage, Fleta said.
Damage to Philippine crops would come amid production
losses in other countries, further curbing the global harvest
and potentially sustaining a rally in prices.
Rough-rice futures have surged 43 percent from this year's
low of $9.55 per 100 pounds on June 30 as flooding in Pakistan
and dry weather in the U.S. cut harvests. The contract for
November delivery advanced for a fifth consecutive day today,
gaining 0.3 percent to $13.655 on the Chicago Board of Trade at
12:10 p.m. Singapore time.
Yields Cut
Potential losses may boost the Philippines' import needs by
500,000 tons, pushing prices higher in Chicago and Thailand,
Chookiat Ophaswongse, former president of the Thai Rice
Exporters Association, said by phone from Bangkok today.
"I think it may have some effect, even on U.S. rice
prices," said Chookiat, who advises the export group. Thai rice
prices may rise by as much as $20 a ton, he said.
The price of 100 percent Grade-B Thai white rice, the Asian
benchmark, dropped 0.2 percent from a week earlier to $510 a ton
in the week ended Oct. 6, according to the Thai Rice Exporters
Association.
The Food & Agriculture Organization of the United Nations
pared its estimate for global rice production on Sept. 1 for the
second time since April as lower water levels in the Mekong
River cut yields in Thailand and Vietnam, the world's two
biggest exporters, and after the floods in Pakistan.
The FAO cut its milled rice production forecast for this
year to 467 million tons on Sept. 1, compared with 474 million
tons in April, and 472 million tons in a June report.
Missed Forecast
The rice harvest in the U.S., the world's fourth-largest
exporter last year, may be at least 10 percent smaller than
estimated, missing a forecast for record output and pushing
prices to as high as $17 per 100 pounds, Dwight A. Roberts,
president of the U.S. Rice Producers Association, said last
week. Roberts correctly predicted the grain would peak at $16
last year.
The U.S. Department of Agriculture lowered its estimate for
for this year's U.S. rice paddy production by 5 percent to 11
million tons and forecast that average yield per acre would drop
to the lowest since the 2005-2006 season.
The Philippines issued its highest alert for Megi as the
storm headed for landfall in Luzon island. The storm made
landfall at Divilacan, Isabela province, at about 11:30 a.m.,
Benito Ramos, administrator at the Office of Civil Defense, said
by phone.
The nation's rough rice production was forecast to be
little changed from a year earlier at 16.266 million tons this
year, after El Nino, which causes drier-than-normal weather,
parched crops, according to the July estimate by the Bureau of
Agricultural Statistics.
The country's milled-rice demand was estimated by the USDA
at 13.7 million tons this year. That's about 21 million tons of
rough rice, according to Bloomberg calculations, based on the
nation's milling recovery rate of 65 percent.
For Related News and Information:
Top Commodity Stories: TOP CMD <GO>
Crop Calendars: CCAL <GO>
Top Agriculture Stories: TOP AGR <GO>
Stories Mentioning Food Shortages: NSE FOOD SHORTAGE <GO>
Retail Food Prices: ALLX APD <GO>
Agricultural Supply, Demand Data: GCSD <GO>
Farm-product Prices, Data: AGGP <GO>
--With assistance from Joel Guinto, Cecilia Yap and Francisco
Alcuaz in Manila. Editors: Matthew Oakley, Richard Dobson.
To contact the reporter on this story:
Luzi Ann Javier in Singapore at +65-6212-1304 or
ljavier@bloomberg.net
To contact the editor responsible for this story:
James Poole at +65-6212-1551 or
jpoole4@bloomberg.net
