Kuala Lumpur, May 15 (Reuters): Cyclone damage to Myanmar’s rice crop could stir up prices, which have shown signs of easing after forecasts of a record global crop calmed nervous markets.

The Food and Agriculture Organisation (FAO) said Cyclone Nargis damaged 20 per cent of rice paddy in Myanmar’s five disaster areas, compared with 7 per cent losses estimated by the US Department of Agriculture (USDA).

“About 20 per cent of the rice fields have been damaged,” FAO regional chief He Changchui said, adding farmers had about 50 days to plant their next rice crop.

“There is not much time. The planting season has started already. We need to have the funds and resources to bring the farmers back,” Changchui told Reuters in an interview.

Traders said news of further damage to Myanmar’s rice crop could be bullish for the rice markets.

“This means things are going to be difficult,” said Atul Chaturvedi, chief executive of Indian trading firm Adani Exports. “Myanmar was exporting rice before the cyclone and this means they will be out of the market.”

Rice prices have trebled this year with world stocks at their lowest since the early 1980s and demand strong.

The crisis over soaring food costs and supplies has sparked riots in Africa and toppled Haiti’s government. Although Asia consumes nearly 90 per cent of the world’s rice, the impact has been limited, as countries, such as China, India and Japan, are self-sufficient.

US rice futures for July dropped more than 3 per cent in Asian trading today, after falling by the same margin overnight as worries eased over the world’s supply of rice.

US rice prices have been falling all week, with the July contract down 9 per cent from Friday’s close, after the US department of agriculture forecast a record world rice crop for 2008 and said stocks would grow.

In India, the world’s biggest rice exporter after Thailand, traders said early monsoon rains could boost its rice output, easing panic in the market that had prompted a ban on exports.

“It is a superb news. The whole panic of rice shortage will end,” said Anil K. Mittal, chairman and managing director of KRBL Ltd, a leading rice exporter.