'Asia's 2002 rice output may be affected by El Nino'

'Asia's 2002 rice output may be affected by El Nino'

Dow Jones, Bangkok

A likely return of the drought-inducing El Nino weather
phenomenon this year could affect rice paddy harvests in Asia,
the United Nation's Food and Agriculture Organization, or FAO,
said Friday.

An expected recurrence of the El Nino weather condition could
affect paddy output in the Philippines and Indonesia, according
to the FAO's latest Rice Market Monitor released in Bangkok
Friday.

The El Nino weather, known to take place once every two to
seven years, last hit the Asian region during 1997-98, when it
caused severe drought and serious damage to agricultural
production, particularly in Indonesia, the Philippines and Papua
New Guinea, the FAO said.

Based on recent observations, the national Oceanic and
Atmospheric Administration is considering a possible return of El
Nino next spring, although there is still considerable
uncertainty over its strength and amplitude, the FAO said.

Excessive rain so far in Indonesia and a recurrence of the El
Nino "could stand in the way of the ambitious target of 53.9
million metric tons (of paddy) set by the (Indonesian) government
for 2002 against the 50.1 million tons of output in 2001," it
said.

The 2002 paddy crop is underway in the Southern Hemisphere,
and the harvest season has just begun in Indonesia, the FAO said.

Uncertainty from the El Nino also surrounds the 2002 paddy
harvest in the Philippines, where its 2001 rice production was
affected by Typhoon Lingling in November last year, the FAO said.

Amid the uncertainty of the El Nino's effect on Asian rice
output, international rice trade is forecasted to grow to 23.8
million tons, from 23.4 million tons in 2001, it said. An
expected increase in international rice trade this year has
mainly contributed to a surge in imports by China and Indonesia,
the FAO said.

China is expected to import nearly 1 million tons this year
under its obligation to the World Trade Organization, while
Indonesia is expected to step up rice imports by 50% to make up
for its disappointing 2001 domestic harvest, it said.

An expected slump in African rice imports in 2002 appears to
have capped further growth in 2002 international rice trade.
African rice imports are expected to fall to 6.3 million tons,
from an exceptionally high 7.1 million tons in 2001, due to large
stocks and an anticipated rise in international rice prices, the
FAO said.

World rice prices are continuing to recover amid gains in
Thailand following its government's intervention in the domestic
paddy market coupled with strong import demand due in part to a
temporary export ban by Vietnam, it said.

The Vietnamese government this month, however, lifted the ban,
which had been imposed since November last year, and allowed
exports from the middle of February onwards.

However, the Indian government's huge rice stock of around
24.8 million tons would encourage subsidized export prices in the
country and put pressure on the international market, the FAO
said.