Wheat’s Rally to Fuel Gains in Rice, Zeigler Predicts

Rice, the staple food for half the world, may advance following a rally in wheat prices as consumers seek alternatives, according to Robert Zeigler, director general of the International Rice Research Institute.

“If wheat production falls, people will have to substitute with something in their diet: rice is the easiest one,” Zeigler said in an interview on Bloomberg Television today. There are no signs of panic buying at this stage, Zeigler said.

Wheat climbed to the highest level in more than two years this week on concern drought inChina may curb output, boosting competition for dwindling global supplies. The jump may fuel further gains in global food costs, which reached a record last month. The world’s neediest people are most affected by rising food costs, World Bank President Robert Zoellick said yesterday.

Wheat on the Chicago Board of Trade, the global benchmark, touched $8.9325 a bushel on Feb. 9, the highest level since Aug. 25, 2008. The grain has surged 71 percent over the past year afterRussia banned exports and floods hurt crops in Canada and Australia. Rough-rice futures, trading today at $16.07 per 100 pounds in Chicago, have gained 12 percent in the past year.

China, the top wheat consumer, is having a prolonged drought in its main growing region, according to Minister of Agriculture Han Changfu. The nation will spend 12.9 billion yuan ($1.96 billion) to bolster grain production and fight the drought, Premier Wen Jiabao has said.

The International Rice Research Institute, or IRRI, is a research center in the Philippines that develops crop varieties and farm techniques to help growers to improve yields and quality, according to its website. Zeigler has more than three decades experience in agricultural research.

(Source: http://www.bloomberg.com/news/2011-02-11/wheat-s-surge-may-fuel-gains-in-rice-prices-irri-s-robert-zeigler-says.html)