Storm Could Worsen Food Crisis

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The cyclone that swept through Burma over the weekend could exacerbate the global food crisis, though the impact is likely to be felt more intensely by Burma’s neighbors than by the country itself, analysts said yesterday.

“The cyclone hit the Irrawaddy Delta, which is like the rice bowl of Burma,” the publisher of a newsletter on the rice market, Robert Papanos of the Rice Trader, said.

However, he said Burma may have dodged a bullet, since at this time of year one crop of rice has just been harvested and another is about to be planted. “They may be lucky,” Mr. Papanos said.

The rice market analyst said the storm could still have a negative impact on existing supply and future production. “Saltwater on top of rice paddies is a bad thing, and saltwater inside of warehouses storing rice is a bad thing,” he said.

“It’s certainly going to be a relatively severe shock for agriculture, but often agriculture can react … relatively quickly,” the U.N. Food and Agriculture Organization’s representative in Washington, Daniel Gustafson, said. “I’m sure there’ll be a requirement for emergency seed distribution, that kind of thing.”

At the Chicago Board of Trade, rice futures for the period between July 2008 and May 2009 were up about 5% yesterday, after selling off sharply last week.

Burma was expected to harvest about 11.3 million tons of rice this year, almost all of it for domestic consumption. Burma did commit recently to selling 400,000 tons of rice to Bangladesh and Sri Lanka, which are struggling to feed their populations. Mr. Papanos said he would not be surprised if Burma’s government backed out of such sales, leaving Bangladesh and Sri Lanka with a potentially serious shortfall.

While self-sufficiency may seem like a triumph given the difficulty some impoverished nations are facing, Burma was once a great power in the rice trade. “Burma, before World War II, was the largest rice exporter in the world. They sold rice to the U.S. and Cuba. Now, under the junta, they’re barely able to feed themselves,” Mr. Papanos said.

A group linked to Burmese dissidents reported last week that the military government, which seized power in 1988, is attempting to force farmers to plant 8 million acres of an obscure tree, Jatropha curcas. The trees produce the oil-rich physic nut, which can be refined into so-called biodiesel fuel. Burmese officials hope the fuel will displace expensive imported oil, but dissidents and some farmers worry that resources and land are being diverted from rice production.


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