By Sambit Mohanty
BANGKOK (Reuters) - Runaway rice prices that have sparkedpanic buying, protests and worries about food security, mayhave peaked and could ease in the weeks ahead as countries rushto boost output, the U.N. food agency said on Tuesday.
"High prices will be there but current prices areunreasonable," He Changchui, the Food and AgricultureOrganization's assistant director-general and regionalrepresentative for Asia-Pacific, told Reuters.
While consumers would have to get used to higher prices forthe Asian staple, the current market price has been distorted,he said. But with some countries expecting bumper crops andothers boosting future production, the current shortage mayease, he added.
On Tuesday, U.S. rice futures fell more than 2.5 percent,deepening a retreat from last week's record high as topexporter Thailand said it would release government stocks andtraders looked ahead to Asian harvests.
The World Bank on Tuesday called on countries not to banexports of food, saying that only worsens the problem.
"We are urging countries not to use export bans," WorldBank President Robert Zoellick said in a statement. "Thesecontrols encourage hoarding, drive up prices and hurt thepoorest people around the world who are struggling to feedthemselves."
"The next few weeks are critical for addressing the foodcrisis," he said after a meeting of U.N. agency heads to tacklethe food price crisis. Zoellick said he believed rice and cornprices would remain high, and wheat relatively high.
POLITICAL COMMODITY
U.N. agencies and the World Bank will set up a task forceon food to deal with the unprecedented rise in global foodprices, the United Nations said on Tuesday.
"We consider that the dramatic escalation in food pricesworldwide has evolved into an unprecedented challenge of globalproportions that has become a crisis for the world's mostvulnerable, including the urban poor," the United Nations saidin a statement after a meeting of U.N. agency heads.
Rice is a political commodity in countries where the grainis a staple and any news of moderating prices would bringrelief to governments as they grapple with the problems ofsurging prices, the prospect of further depleting state coffersto fund subsidies and the spectre of street protests.
Concern about soaring food costs and limited supplies havetoppled Haiti's government and caused riots in parts of Africa.
In West Africa, more than 1,000 people marched throughSenegal's capital Dakar at the weekend to protest againstrising food prices. In Guinea, about 50 demonstrators marchedpeacefully in the capital Conakry on Monday.
In Thailand, the government's pledge to release the 2.1million tonnes of stockpiled rice on Tuesday came a day after atrade official said the country's rice prices were likely toease by about 20 percent in coming weeks on increased supplyfrom the new domestic crop.
"Don't worry, we'll have ample stock for domesticconsumption as we will buy back as much as what we have sold,"Yanyong Puangrach, head of the Commerce Ministry's Departmentof Internal Trade told reporters after the plan was approved.
But FAO's He said a price moderation did not the days ofcheap rice would return.
"We are hoping that it (increasing productivity) will easethe market situation. But we should not anticipate thatconsumers will get rice at those original levels," He said.
(Additional reporting by Laura MacInnis in Berne, MiyoungKim in Seoul, Apornrath Phoonphongphipat in Bangkok, CarmelCrimmins in Manila and Ho Binh Minh in Hanoi; Writing byValerie Lee; Editing by Bill Tarrant)