World rice supplies are reaching dangerously tight levels as stores of South Asia's staple food fall to 25-year lows and governments strive to stabilise domestic markets.

According to Jonathan Pincus, the United Nations Development Programme's chief economist in Vietnam: “Supplies are stretched and historically every Asian government has shown it is very aware of the close relationship between political stability and the stability of the rice market.”

Analysts say that the gradual increases absorbed so far by large rice importers are threatening to bite, with some local markets reporting a tenfold rise in prices over the past year.

Most of the world's rice crops are consumed by the countries that produce them, which means that the global market is relatively thin and is prone to violent swings.

This month the Philippines failed to secure enough rice to boost its inventories, leading to suggestions that the market was heading for a period of heightened volatility. Traders offered to sell the country only 325,000 tonnes, when it wanted 550,000. The average offered price, of nearly $680 (£342) a tonne, was up more than 40 per cent from January. A spokesman for the Philippines National Food Authority said: “Our population is growing and arable land is being converted to other uses, so we cannot cope with demand.”

Similar trends have emerged in other big rice-consuming countries, including China, where large amounts of farmland have been turned to industrial use. Countries such as India have placed restrictions on exports. The US Department of Agriculture has given warning that more such curbs are expected and it predicts that global stocks will fall to about 70million tonnes this year, their lowest since the early 1980s and half the level of those in 2000.

The United Nations has called for richer nations to assist Bangladesh, where 40 per cent of people live below the poverty line, in tackling surging prices of foodstuffs. It said that poor households in the country spend nearly 70 per cent of their income on food.

On Thursday, the World Bank lobbied India to export rice to Bangladesh. However, Indian officials have their eyes fixed on their home markets and on the same day slashed import duties on several types of edible oil and rice in an effort to clamp down on a recent jump in inflation that is threatening the country's economy as a whole.

The Indian Finance Ministry said that the international price of crude palm oil has increased from $770 a tonne to nearly $1,220 in the past six months. “Retail prices for rice in Delhi markets increased from 15 rupees [19p] per kg to 18 rupees per kg over the same period,” it said.

Yet other countries are profiting. In January and February, Vietnam made $150 million through rice exports, an increase of nearly 80 per cent over a year ago.

World rice consumption has increased by 40 per cent in the past 30 years, from 62kg per person to 86kg, and only about 7 per cent of production is traded internationally, compared with 18 per cent for wheat. Rice productivity varies widely between countries. In 2000 Vietnam's rice yield was nearly twice that of Thailand.

Across Asia, pre-harvest losses of rice, mainly to rats, stand at as much as 17 per cent in some countries, with a 6 per cent loss throughout the continent representing enough to feed 225 million people, roughly the population of Indonesia, for a year.

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