(Corrects amount of rice paddy affected in paragraph 10)

YANGON, June 4 (Reuters) - Thu Zar Nwe's rice store on a dusty street in Yangon has done roaring trade since last month's cyclone and sea surge engulfed more than one million acres of arable land in Myanmar's key food bowl.

"If they have money, people are buying for a long time," she said, as workers loaded an antiquated truck with 50 kg sacks of rice outside her "Silver Earth" bulk rice shop.

The shop has been selling up to 300 sacks a day since Cyclone Nargis struck on May 2.

Since the storm, the price of top quality rice has jumped from 28,000 kyat per bag (about $25.45), to 42,000 kyat, making life even tougher in what was already one of Asia's most impoverished nations after 46 years of military rule.

Thu Zar Nwe's store is a minor oddity in Myanmar since it is private and not linked to the ruling generals, who keep a tight rein over the market for the country's staple food.

"Next year we will have problems getting good quality rice, so I think the price can only go up," added Thu Zar Nwe, a small diamond sparkling on her front tooth.

"Ordinary people are buying lower quality rice. Business is bad for most people apart from the rich, so they are buying daily, bit by bit," she added.

In a tiny room in a food and grocery market nearby, shopkeeper Khin Soe tells the same story.

"The wealthy are buying and holding the rice, and for them it is okay. The poor have to buy what they can each day," he said, sitting shirtless in the morning heat.

A U.N. official said on Wednesday that 60 percent of the 1.3 million hectares (3.2 million acres) of rice paddy in the five disaster areas had been affected by the cyclone, which left 134,000 people dead or missing.

Some 16 percent, or 200,000 hectares, was seriously damaged.

Some land had been drained, but farmers still faced many hurdles, including a lack of shelter, rice seeds, fertiliser and ploughing animals, most of which were killed, Hiroyuki Konuma of the U.N.'s Food and Agriculture Organisation said.

"About 200,000 hectares will not be able to be used for the coming production season," he told a news conference in Bangkok.

International aid workers hope that around half of the rice farmers in the delta will be able to plant at least an acre of rice for the critical monsoon crop.

The June planting, watered by the seasonal rains, produces the main rice crop in the delta, the "rice bowl of Asia" in the days when Myanmar was called Burma and administered as part of the British empire.

But with so much land still flooded, the U.N. is lobbying Myanmar's junta to accept it might need short-term rice imports.

The U.N.'s World Food Programme estimates that it will need to feed at least 750,000 people in Yangon and the delta for some time to come.

Illustrating the impact of the storm, another store owner, Lem Lem Khine, had just received a consignment of 50 sacks of rice she bought before the cyclone and could have sold for a top price.

Instead, it has been soaked through by the rain and has now turned varying shades of brown.

"Now it is good only for pigs," she said in disgust. (Additional reporting by Darren Schuettler in BANGKOK) (Editing by Ed Davies)

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