MANILA, Philippines--Rice production in Asia is forecast to reach a new record level this year, but prices of the staple in the world market will likely still remain high in the coming months, the United Nations Food and Agriculture Organization (FAO) warned.

"World paddy production in 2008 could grow by about 2.3 percent reaching a new record level of 666 million tons, according to our preliminary forecasts," FAO rice expert Concepcion Calpe said in a statement.

According to Calpe, paddy production in Asia may surpass "for the first time" the 600-million-ton benchmark this year, amounting to 605 million tons.

"Major gains are expected all across the region. Bangladesh, China, the Philippines, Thailand and Viet Nam could register the largest gains. Prospects are also buoyant for Indonesia and Sri Lanka, despite some recent flood-incurred losses," Calpe said.

Assuming normal rains in the coming months, rice production in Africa is forecast to grow by 3.6 percent to 23.2 million tons in 2008, with large expansions anticipated in Ivory Coast, Egypt, Ghana, Guinea, Mali and Nigeria.

Paddy production in Latin America and the Carribbean is also expected to rebound by 7.4 percent to 26.2 million tons in 2008.

Production prospects, however, are negative for Australia, the United States and Europe.

But Calpe said that prices of the staple are still expected to "remain extremely firm, at least until the third quarter of 2008, unless restrictions on exports are eased in the coming months."

"For prices to fall, favorable weather conditions must prevail in the coming months and governments relax rice export restrictions. Even then, rice prices are unlikely to return to the levels of 2007, as producers have to pay much more for their fertilizers, pesticides and fuel," FAO said.

FAO earlier said that rice prices had skyrocketed by around 76 percent between December 2007 and April 2008, owing to a number of factors such as export bans, increased consumption of rice and a global constriction in supply of the staple, among others.

In a bid to avoid food scarcities in their own countries, major rice exporters have recently imposed export bans, taxes or ceilings.

FAO said these export restrictions would influence trade in rice, estimated to reach 28.8 million tons in 2008, or about 7 percent or 2.2 million tons lower than the 2007 record level.

"These measures further restricted the availability of rice supplies on international markets, triggering yet more price rises and tighter supply conditions. At the moment, only Thailand, Pakistan and the United States, among leading exporters, are exporting rice without any constraints," Calpe added.

Auctions by the Philippines to import massive volumes of rice have also contributed to record high rice prices, FAO added.

If anything, FAO said the sudden surge in world rice prices had finally shed some light on major medium-term constraints that were often ignored in the past two decades, particularly for the farm sector.

These include low investment in agriculture, especially irrigation; reduced funding for agricultural research; environmental problems; stagnating productivity; and migration from rural areas to the cities.