The destruction of Myanmar's food basket by the devastating cyclone Nargis, could lead to a worsening of the global rice production outlook, according to the United Nations Food and Agriculture Organisation (FAO).

The FAO says the cyclone, which struck the South-East Asian nation last week, flooded rice-growing areas and destroyed several warehouses and stocks. It hit Myanmar as paddy farmers were harvesting their dry season crops, which accounts for 20 percent of annual rice production.

Prices of rice in Rangoon have skyrocketed by 50 percent, and the FAO says if Myanmar turns to neighbouring countries such as Thailand and Viet Nam for imports, this could lead to a further upwards pressure on global prices.

The cyclone is one factor as to why the FAO says rice prices could continue to soar in the short term, despite production in Asia, Africa and Latin America reaching record highs in 2008.

The FAO's preliminary forecasts show global harvests will be up by 2.3 percent to reach an all-time high of over 600 million tons. However there will be no relief in the record prices as a large portion of this year's crop will only be harvested at the end of 2008.

According to the FAO Rice Price Index, international prices soared by 76 percent between December 2007 and April 2008.

The FAO's rice expert, Concepcion Calpe, says rice 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.

In a bid to prevent shortages in their own countries, major rice exporters, such as India and Viet Nam. have recently set export bans, taxes or ceilings.

Ms Calpe says Thailand, Pakistan and the United States are the only leading exporters selling rice overseas without any constraints.

The FAO says rising price of fertiliser, pesticides and fuel are also contributing to the soaring prices, and favourable weather conditions are needed for them to fall from their current levels.

© NewsRoom 2008