Thailand, Oct 14 - Rice prices should be relatively firm in 2011 because of limited supply and erratic weather that may curb production in big producing countries, the International Rice Research Institute (IRRI) said on Thursday.

But Thailand's benchmark 100 percent B grade white rice was unlikely to go anywhere near the record high of $1,080 per tonne seen in mid-2008, senior IRRI economist Samarendu Mohanty said, expecting the high next year to be near $600.

"Prices have already gone up as the market is very tight. I think prices will stay strong at this level. The 100 percent white rice should stay near $600 a tonne," Mohanty told Reuters in an interview on the sidelines of a rice meeting in Phuket.

The benchmark grade was offered at $505 per tonne on Thursday, up slightly from last week's $500 a tonne, due mainly to strength in the Thai baht, which has forced exporters to raise their offer prices.

Vietnamese 5 percent broken grade white rice was at $465-$475 a tonne.

Prices have been supported in recent weeks by strong demand as the world's major rice buyers, the Philippines and Indonesia, are in the market for rice from Vietnam and Thailand, both for what is left of this year and next year.

Mohanty forecast total 2010/11 world rice production at 450 million tonnes of milled rice, down from a previous forecast of 460 million tonnes, saying that should support prices in 2011.

"I don't think rice prices should go down," Mohanty said, adding that firmness in other food commodities such as wheat and corn should provide further support to rice.

However, he said there was no special demand from buying countries liable to push prices up above $1,000 a tonne, as in 2008, when fears about food supplies caused a panic.

"We have rice stocks sitting in Thailand and Vietnam, and if there's no weather disaster again from now on, I don't think prices should reach that high."

FLOODS

Thailand, the world's biggest rice exporter, has forecast only small damage from recent floods to its main 2010/11 crop to be harvested from November, expecting 22.9 million tonnes of paddy, down from a previous forecast of 23.2 million.

Mohanty also thought the impact on the world rice market of the severe flooding in Pakistan would be limited. He estimated output there would drop to 3.5 million tonnes in 2011, with domestic consumption at 2.5 million.

Mohanty agreed with Indian traders that New Delhi would ease rice export controls a little in 2011.

"India may export some basmati rice. For non-basmati rice, I don't expect them to remove the export ban," Mohanty said.

The Indian government could allow export of some non-basmati rice on a case-by-case basis next year, but the combined amount could be below 3 million tonnes, which would have a minimal impact on the world market, he said.

Mohanty and traders at the Phuket meeting said they expected India to keep the overall ban in place in 2011 for reasons of food security, to make sure it had enough of the staple for its population of over 1 billion.

"India has a very huge, extensive, domestic food distribution programme for the poor. They usually need 10 million tonnes of rice to be distributed to the poor at subsidised prices through the government distribution programme," he said.

Source: Reuters