News

September 01, 2008

Gustav Threat To US Rice Crop Boosts Prices

By Sally White

Rice prices roared up on Friday on the threat Tropical Storm Gustav to US major rice growing areas. Although the storm's projected path remained unclear, it was seen as having the potential to cause significant damage to the crop, depending on where it hits. The timing of the storm is poor because rice in many areas is being prepared for harvest.

In Chicago November rice ended up US 48 cents at US$18.97 per hundredweight after trading 50 cents higher - the daily trading limit - for much of the day. The September 2008 contract, which traded without limit because it is in delivery, was up US61 cents at US$18.90/kg.

Traders said the worst-case scenario would be that the storm hit around the Louisiana-Texan border causing wind damage along the coast and then dumping inches of rain along the Mississippi Delta. That would...