‘Philippines may lose over 800,000-T rice to El Nino’

MANILA, Philippines – A severe El Nino weather pattern this year could cut the Philippine paddy rice harvest by more than 800,000 tons, a senior official said on Tuesday, which could mean more rice imports.

The country, the world’s biggest rice buyer, could lose 816,372 tons of paddy rice, worth P12.24 billion ($258 million), from a severe dry spell caused by El Nino, Agriculture Undersecretary Bernardo Fondevilla said in a statement.

A mild El Nino, the abnormal warming of waters in the equatorial Pacific, however may help reduce crop losses to a smaller 264,940 tons, said Fondevilla.

In response to either scenario, the government has set aside P570 million to mitigate the impact of El Nino on rice output, including cloud seeding over watershed areas and boosting irrigation systems, Fondevilla said.

Manila expects rice imports this year to hit a record 2.4 million tons as it makes up for typhoon damage caused last year to the crop.

The government had earlier said it may import more if El Nino causes widespread rainfall shortages, though the impact of any new imports on prices is expected to be mild, traders said.

Benchmark Thai rice steadied at $585 per ton last week and are likely to fall further on increased supply.

Unmilled rice production is forecast to drop 1.7% to 7.25 million tons in the first half of 2010 from a year earlier because of the dry spell, the Bureau of Agricultural Statistics said last month.

The Philippines lost 1.3 million tons of paddy last year after strong typhoons ravaged crops in September and October, prompting the world’s biggest rice importer to advance 2010 purchases.

The government has already contracted to buy 2.25 million tons, mostly from Vietnam, from four tenders in November and December, for delivery between January and June, data as of Jan. 29 from state grain importer, the National Food Authority, showed on Tuesday.

Of the total, more than 675,000 tons have either been loaded for shipment to the Philippines or were already in ports and warehouses, the agency said.

Manila has also said it would allow private firms to bring in 163,000 tons of rice until Aug. 15, to bring total imports for the year to just over 2.4 million tons, trumping the previous record of 2.3 million tons in 2008 which helped push grain prices to record peaks. –Reuters