The recession could force more people to return to staple foods, putting added pressure on the price of rice.

The price of rice is likely to rise sharply because of the economic crisis, a research group has warned.

The Philippines-based International Rice Research Institute (IRRI) says tight credit and dwindling grain prices have pushed farmers in exporting countries to plant less, and this could lead to prices taking a sustained upward trend.

Combined with other factors like the falling Kiwi dollar and the non-preferential status of New Zealand as a rice importing country, local rice merchants predict that prices here will rise more sharply than in other countries.

Last year, local merchants reacted to a global rice crisis by setting limits on how much customers can buy, but rice importer Ursula Lawrence, owner of Thai Rice Wholesalers, said that crisis was well and truly over.

"Business has returned to normal, and there is now definitely enough to go around," Ms Lawrence said.

But the IRRI said in its latest issue of its quarterly publication, Rice Today, that the declining rice prices, combined with strong demand growth, will result in another rise in rice prices this year.

Last week, Benchmark Thai rice was around US$500 ($810) a tonne, sharply down from the record US$1080 set last April.

Still, the price of Thailand's 100 per cent B grade white rice - one of the more widely consumed grains in New Zealand - rose for the first time in more than a month, to US$550 a tonne from US$520 at the end of December.

Projections by the institute for the global consumption of rice, which is the staple for nearly half of the world's population, will go up 1 per cent from last year to around 426 million tonnes in 2009.

Although the world has produced a record rice crop in each of the last four years, the increase came mostly from expanding the rice fields rather than producing more rice per hectare, the IRRI said.

"If the yield growth rate does not improve, we can expect rice prices to continue to rise, and at a faster pace than that seen since prices started moving up in 2000," the institute said.

Thevi Chai, owner of the Green Bay Asian supermarket chain, who also imports rice from Thailand, says the falling Kiwi dollar is also making rice more expensive to import.

"Also because of the low Kiwi dollar and the unstable situation in Thailand, we are paying quite a lot more for rice now. We are really finding it very hard not to pass it on to our customers," Mrs Chai said.

Mrs Chai said a 25kg sack of rice cost $55 at her stores, but some supermarkets have already increased their prices to over $60.

Auckland rice merchant Bing Kanok, who imports speciality rice for supply to restaurants, said he has found it harder to get enough supplies of grains such as parboiled or basmati rice.

Mr Bing believes that it will be just a matter of time before rice consumers would have "to pay double" for their grains, because New Zealand was not considered a "priority country" by exporters.

The Philippines, the world's biggest importer last year, has cut its 2009 rice production estimate by nearly 4 per cent as farmers struggle to get loans to buy farm inputs, the IRRI said, and other rice producing countries could follow.

"Making matters worse, the economic slowdown may increase the demand for rice in developing countries as falling income forces poor people to switch back to less expensive staples," the institute added.