Children from flood-hit town Rosales, Pangasinan wait for the distribution of relief supplies

Rice futures surged to a nine-month high in Chicago after the Philippines, the world’s biggest importer, said it may boost overseas purchases because storms have damaged the domestic crop.

A slumping dollar also fueled demand for rice, and wet weather has delayed harvesting in the U.S., the world’s fourth- biggest exporter. Last year, rice jumped to a record after the Philippines boosted purchases and some exporters curbed shipments, pushing cooking inflation higher and sparking unrest in countries including Haiti and Egypt.

“We have the dollar falling, the wet weather in Arkansas is slowing the harvest there, and on top of that, what’s happening in India and the Philippines,” said Dennis DeLaughter, a rice grower and owner of Progressive Farm Marketing Inc. in Edna, Texas. “This could be a pretty big deal that will drive up the world price of rice.”

Rough rice for November delivery rose 29 cents, or 2.1 percent, to $14.19 per 100 pounds at 11:11 a.m. on the CBOT, after earlier reaching $14.29, the highest price for a most- active contract since Jan. 13. Futures touched a record $25.07 in April 2008.

‘Basic foodstuff’

“If we start having problems, weather problems, production problems, the price of rice is going to skyrocket over the next decade,” investor Jim Rogers, chairman of Rogers Holdings, said in an Oct. 12 interview. “When it happens, I don’t know,” he said. “Rice is a basic foodstuff for much of the world.”

The Philippines has enough rice to last the rest of this year, Yap said Thursday at a briefing, reiterating recent comments. The country will import “only as a last resort,” he said, without giving a figure for how much may be bought in a second tender. The Philippines “has the “flexibility to enter the market when appropriate,” Yap said.

Parma, the storm that devastated crops in the nation’s second-largest rice-producing region, was forecast to make landfall in Vietnam Thursday, the world’s second-biggest rice exporter.

The Philippine Department of Agriculture Wednesday boosted the estimate for losses to rice output from Parma and Ketsana, an earlier storm, to 13 percent of the 6.5 million ton fourth- quarter forecast, from 8.6 percent a day earlier. The revised figure equates to about 545,550 tons of milled rice, according to Bloomberg calculations based on average recovery rates.

Strong demand

“Prices are likely to climb further on the back of strong demand from the Philippines,” Euben Paracuelles, an economist at Royal Bank of Scotland Plc, wrote in a note dated Wednesday and received Thursday.

The Southeast Asian nation will monitor developments in the global rice market and study local planting intentions before deciding to import more, Yap said. Imports for 2010 may total 2 million tons, according to the National Food Authority.

The average price of well-milled rice in the Philippines gained 4.2 percent to 35 pesos (75 cents) per kilogram as of Oct. 13, compared with the last week of September, according to the Bureau of Agricultural Statistics.

“Given that initial assessments of the impact of the damage tend to be understated, and that the risk of more typhoons cannot be ruled out, next year’s import requirements could approach 2008 levels,” RBS’s Paracuelles said. The Philippines imported 2.3 million tons in 2008.

In the U.S., about 69 percent of the rice crop was harvested as of Oct. 11, down from 87 percent, on average, from 2004 to 2008, data from the Department of Agriculture show. The value of the dollar has dropped 11 percent in the past six months against a basket of six major currencies, boosting the appeal of U.S. commodities for buyers using other currencies.

Thailand is the world’s largest rice exporter, followed by Vietnam and Pakistan, according to USDA data.

Source: Bloomberg