Pests, El Nino seen removing global rice glut

Bangkok

A RICE glut that sent prices slumping more than a year ago is shrinking, just as El Nino arrives to parch paddies across Asia.

Global inventories were already heading for an eight-year low, including stockpiles so spoiled that top exporter Thailand may sell most for industrial use. Now, the first dry-weather pattern since 2010 is threatening crops in the Philippines, Indonesia and India.

At a time when world food costs are the lowest in more than five years, rice may surge more than 40 per cent if monsoon-season rains falter, said Jack Scoville at Price Futures Group in Chicago.

"The bigger risk is yet to come," said Fred Neumann, co-head of Asian economics research at HSBC Holdings plc.

El Nino is causing havoc in the market for rice, the food staple for half the world's population. The Philippines, once the biggest buyer, will have to import more to address weather-related disruptions to food supply, the International Monetary Fund said.…