Rice surges to new high on supply worries

By Julie Ingwersen

CHICAGO (Reuters) - U.S. rice futures rose to a fresh all-time high on Wednesday on worries about supply shortages that have triggered political unrest and export restrictions designed to protect dwindling domestic stocks.

U.S. soybean futures were higher as well, while wheat prices fell 4 percent on prospects for a large global crop in 2008.

On the Chicago Board of Trade, July rough rice futures hit a record high of $24.85 per hundredweight and stood 56 cents higher, or 2.3 percent, at $24.76 as of 12:40 a.m. EDT.

Spot rice prices are up about 80 percent so far in 2008.

"Some of the main rice producing countries have imposed export curbs ... and this has combined with low global stocks to drive rice higher," said Kenji Kobayashi, a grains analyst at Kanetsu Asset Management in Tokyo.

"Rice has been hitting successive records. It's neared $25 and I think $30 is now on our horizon," Kobayashi said.

Trade bans have been put in place by India, the world's second-largest rice exporter in 2007, and Vietnam, the third-biggest, in the hopes of cooling domestic prices of the staple food. Thailand is the largest exporter.

The export curbs have been criticized by the Asian Development Bank, which said Asian governments were overreacting to surging food prices by resorting to market-distorting measures.