Thailand’s most severe floods in five decades have spread across half the country, killing at least 68 people and damaging 3 percent of agricultural land in the world’s biggest rice-exporting nation.

The deluge may cause as much as 20.2 billion baht ($674 million) of damage and pare economic growth in Southeast Asia’s second-biggest economy by 0.2 percentage point this year, the Finance Ministry said.

About 4 million rai (1.6 million acres) of agricultural land has been affected, according to the Office of Agricultural Economics, equivalent to 3 percent of available farmland. The main rice crop, which accounts for about 75 percent of annual output, may shrink 4.3 percent this year, the state agency said.

“Production of rice and cassava will likely fall,” Apichart Jongskul, the office’s secretary-general, said by phone today. “Sugar cane and corn will have only minor damage.”

Cyclones and heavier-than-normal monsoon rains have deluged parts of Southeast Asia this month, killing hundreds of people and affecting millions more in key rice-producing regions.

Rice futures on the Chicago Board of Trade have jumped 57 percent since the end of June, when floods ravaged crops in Pakistan and Thailand, suppliers of 43 percent of global shipments of the grain. Rough-rice for January delivery gained for a 13th day, adding 0.3 percent to $15.21 per 100 pounds and extending the longest winning streak since at least 1989. The price touched $15.22 yesterday, the highest since Jan. 6.

Rice Fields Damaged

About 4.8 percent of Thailand’s rice-growing area, or 2.8 million rai, has been affected by the floods, Apichart said. About 600,000 rai of land was completely devastated, and the rest partially damaged, he said. Thailand’s main rice crop is planted over about 58 million rai of the nation’s 130 million rai of total farmland, he said.

Production from the main harvest of unmilled grain, which begins in late October, may fall to about 22 million metric tons, from an earlier estimate of 23 million tons, Apichart said.

About 2.5 percent of Thailand’s sugar cane has been partially destroyed, from a total planting area of 6.56 million rai, Prasert Tapaneeyangkul, secretary-general of the Office of the Cane and Sugar Board, said by phone on Oct. 27. “Overall damage is quite minimal,” he said.

Thailand’s floods have spread to 38 provinces, affecting at least 3.8 million people, the Department of Disaster Prevention and Mitigation said in a statement. Floodwaters receded in 11 provinces, leaving 27 inundated, it said. Heavy rain may cause flash floods and landslides in 15 southern provinces before the end of the month, the agency warned.

Eroding Economic Growth

The finance ministry today cut its forecast for economic growth this year to 7.3 percent after evaluating the effects of the flood and the baht’s appreciation to a 13-year-high. It lowered the estimate yesterday to 7.4 percent from 7.6 percent.

Gross domestic product may expand 7.4 percent in the third quarter and slow to 2.3 percent in the fourth quarter, the ministry’s Fiscal Policy Office director, Boonchai Charassangsomboon, told reporters today in Bangkok.

Prime Minister Abhisit Vejjajiva, who called the floods the worst in 50 years, has pledged to give 5,000 baht ($167) each to families in the worst-hit areas as part of a 2.9 billion baht special budget. Economic ministers will meet on Nov. 1 to discuss the effect of the disaster, Abhisit said.

The floods have become a risk factor for the economy, and will be taken into account at the Bank of Thailand’s next meeting on monetary policy, Bank of Thailand Deputy Governor Atchana Waiquamdee said yesterday.

“We don’t know the impact yet,” Atchana said. “The crop may be damaged, but the rising prices may partially help offset the drop in farm income.”

Bangkok suffered only minor flooding along the Chao Phraya river, as the city’s 77-kilometer-long flood-protection system held, the Bangkok Metropolitan Administration said. Authorities are looking at ways to drain water away from the capital before a period of high tides starts on Nov. 8.

Source: Bloomberg