Burma has halted rice exports to stockpile the staple, aiming to shield food costs at home from the possible impact of rising oil prices caused by Middle East unrest, an official said yesterday.

“I think the authorities are just concerned about local consumption because of what has happened in Libya,” an official of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) said on condition of anonymity.

He explained that an increase in oil prices might push up transportation costs and subsequently food prices.

“All commodity prices depend on transportation charges, not only rice,” he added.

Firms were told last week to suspend shipments of rice and cancel all contracts for overseas supply, he said.

Burma may be particularly sensitive to the issue as protests against the rising cost of living in 2007 escalated into huge anti-government rallies that posed the biggest challenge to military rule in nearly two decades.

The country, army-dominated for nearly 50 years, may wait until its new parliamentary system is established before restarting exports, the official said — a sign its rulers may also be worried about political implications of the Middle East unrest.

“We hope to resume rice export again at the end of July after the political situation is stabilised with the formation of a new government,” he said.

Anger at authoritarian Arab regimes in the Middle East and North Africa has raged from Algeria to Yemen and has spread to the previously unaffected Gulf states of Kuwait and Oman.

Protesters against Muammar Gaddafi’s four-decade rule in Libya have seized control of most of the country despite a bloody fightback by his forces. Tripoli remains under his control, but key oilfields in the east have fallen to the opposition.

New York crude prices again breached $US100 a barrel in Asian trade yesterday and economists are concerned about the potential inflation risks.

Burma’s 2007 demonstrations, led by crowds of monks whose striking attire saw the movement dubbed the “Saffron Revolution”, were put down by security forces who killed at least 31 people and beat and detained hundreds.

The country has a new political system after holding elections last November, but opposition figurehead Aung San Suu Kyi was locked up and excluded from the vote and retired generals now dominate the parliament.

Top military leader Senior General Than Shwe has said rice production in Burma has more than doubled since 1988, in a message published in the country’s newspapers yesterday to mark a national Peasants’ Day.

Burma was once one of the world’s biggest rice exporters, but mismanagement by its leaders saw it fall far behind.

It now only has customers for its rice in North Korea and West African countries, where people are too poor to be choosy about the low quality of the product, the business official said.

“We cannot compete with rice exports from Vietnam and Thailand as their rice quality is better,” he said.