SINGAPORE/ISLAMABAD (Reuters) - The devastation is immense, but Pakistans worst floods in 80 years will cause barely a ripple in agriculture markets because of the countrys ample wheat stocks and a global sugar surplus. Still, any signs of further damage to stocks, or problems with planting the next crop, could bolster U.S. wheat futures that surged to a near two-year high earlier this month as a heatwave in Russia devastated the crop there. Swelled by torrential monsoon rains, rivers have flooded Pakistans mountain valleys and fertile plains, killing up to 1,600 people and leaving two million homeless. Six million people still need food, shelter, water and medicine, according to the United Nations. Although half a million tonnes of wheat stocks have been destroyed in the floods, Pakistan still has extra grain to export. Cotton imports may double this year, but since the floods spared the main rice belt in central Punjab, Pakistan will still see a surplus in the grain, which together with wheat is the countrys staple food. I suppose any reduction or downgrades to wheat crops are going to be a little bit friendly for prices, particularly on top of what has happened in Russia and Ukraine, said Luke Mathews, commodities analyst at Commonwealth Bank of Australia. If we have a downgrade in Pakistan, it is not going to be a complete disaster for the country, but it is does put downward pressure on the global supply situation. Even with surplus wheat, worries about political instability and soaring prices could force the government to ban exports, like it did in 2007 following a supply shortage. If we do see wide scale food insecurity and hunger and poverty as a result of this crisis, then the government could come under political pressure both from the opposition and also other rivals, said Maria Kuusisto, analyst with Eurasia consultancy group in London. And certainly the Supreme Court is very keen to criticise the government on any kind of policy failures or inability to provide strong leadership. With roads and bridges destroyed, irrigation works and plantations washed out, the floods will also affect the next wheat sowing in November. Pakistan harvested 23.80 million tonnes of wheat in the crop year ending in May, accounting for around 4pc of global output. With a carryover stock of 4.22 million tonnes, inventories reached more than 28 million tonnes before the floods, well ahead of annual domestic demand of about 23 million tonnes. That means the government will not be overly worried about food supply ahead of the Eid-ul-Fitr celebration in September. The governments wheat stocks have largely remained safe and even after meeting shortages caused by the floods, it would still have a considerable quantity for export, Zahoor Agha, a wheat trader and former official at the Pakistan Flour Mills Association, said. Najib Balgamwala, chief executive of Pakistani trading firm Seatrade Private Ltd, said: Pakistan matters when it imports, it does not matter when it exports, as Pakistan may be exporting 400,000 or 500,000 tonnes and it does not impact global prices much. Fears of falling cotton output prompted some millers to book 200,000 bales of cotton from neighbouring India for November-December delivery, but there was no panic buying in New York cotton futures. The floods may force the government to revise down this years rice output target of 6 million tonnes by 15 percent after 200,000 acres (80,937 hectare) were affected, but Pakistan could still export around 4 million tonnes of rice. While the countrys refined sugar output could fall 500,000 tonnes because of the floods, this should be easily absorbed by a global surplus that the International Sugar Organization expects to be around 3 million tonnes in the 2010/11 season. White sugar futures have lost nearly 30 percent since striking a record in January. Pakistan has made a series of purchases in the int'l market this year following estimates its 2009/10 crop would produce little more than 3m tonnes of white sugar against annual demand of 4.2m tonnes. Still, with output forecasts likely to change in the wake of the floods, analysts warned of volatile prices ahead, especially for wheat. A Food Ministry official said up to 600,000 tonnes of wheat had been damaged or destroyed in the floods. The situation in Pakistan is very fluid and it is seemingly changing every day, said Mathews of CBA. So we would caution reading too much into the accuracy of any production forecast coming out of that part of the world because it is quite possible it could easily overshoot or undershoot those estimates.