Rice prices stabilising in Asia

Hong Kong: The price of rice in Asia, the region's most important food, is starting to stabilise as producers harvest the first crops of the year, boosting supplies, Philippine Agriculture Secretary Arthur Yap said.

"There are harvests coming out," Yap said on Friday in a Bloomberg Television interview in Hong Kong on his return from a United Nations-sponsored Food Security Summit in Rome. "Prices are stabilising."

A halt to surging rice prices may help governments contain inflation and ease concerns about a global food crisis. The ten- member Association of Southeast Asian Nations may hold a regional food summit to discuss a stockpiles plan, Yap said.

Hoarding "was probably the biggest factor behind the increase in prices," David Cohen, director of Asian economic forecasting at Action Economics, said by phone from Singapore. "The underlying supply-and-demand situation had not shifted that dramatically."

Thailand, the biggest rice exporter, has cut the benchmark export price of white rice for two straight weeks, reducing the 100 per cent grade B variety by 15 per cent to $880 a metric ton, according to the Thai Rice Exporters Association. The drop was spurred by Cambodia's May 26 decision to abandon export curbs.

Rough-rice futures on the Chicago Board of Trade have fallen about 20 per cent since touching a record $25.07 per 100 pounds on April 24.

Still, the July contract gained as much as 4.8 per cent Thursday to $20.28 amid signs of rising export demand. The contract on Friday rose by the maximum permitted by the exchange.

A 60 per cent increase in food prices since the beginning of 2007 has sparked riots in more than 30 countries that depend on imported food, spurring the UN summit in Rome.

At the meeting, Yap proposed on June 4 that governments create global stockpiles of commodities to help stabilise food prices and feed the hungry.

Regional leaders may discuss a Philippine proposal for a regional rice stockpile to keep prices and supplies stable, Yap said, without giving a likely date for the gathering.