Production from the second rice crop will drop 43% to the lowest level in 15 years on lack of rainfall, cutting the annual harvest in the world's biggest exporter, according to the Office of Agricultural Economics.
Farmers are set to gather 5.5 million tonnes of rough rice from the harvest now compared with 6.7 million tonnes seen in December and 9.7 million tonnes a year earlier, the government forecaster said. That will lower output in the 12 months through September to 32.6 million tonnes, the smallest since 2009-2010, data compiled by Bloomberg show.
The military junta cut water for the minor crop to preserve supplies for the main harvest which is planted from May. Water levels in reservoirs has fallen to the lowest in 15 years, the government says.
Thailand will ship more this year than any country ever as the government sells record reserves accumulated by the previous administration, US government data show. That's pushed Asian benchmark prices to the lowest in nine months.
The government late last year sought "cooperation" from farmers in refraining from growing the second crop because of drought. Failure to comply can result in no compensation for crop damage or farm subsidies, including supplies of irrigated water.
"Farmers planted less after the government shut sluices because deficient rainfall cut water in major dams, especially in the Chao Phraya basin," said Kanit Likhitvidhayavuth, deputy secretary-general at the office, referring to the river that flows through the main growing areas. "Rice prices are unattractive, prompting growers to switch to other crops," he said in an interview on April 7.
Rates of Thai 5% broken white rice, an Asian benchmark, fell to US$401 a tonne on March 25, the lowest level since June. Futures traded on the Chicago Board of Trade have slumped 31% in the past year to $10.70 per 100 pounds.
Growers worldwide will harvest 475 million tonnes of rice on a milled basis in 2014-2015, near the record 477 million tonnes a year earlier, according to US Department of Agriculture data. Thai shipments will rise 0.3% to an all-time high of 11 million tonnes, the data show.
Farmers in Thailand will probably harvest 33 million tonnes in the 12 months from October, Mr Kanit said.
Source: Bangkok Post