Thai rice futures ended higher on Monday amid expectations widespread drought will hurt this year's second rice crop, brokers said on Monday. Local authorities stopped supplying water for irrigating rice paddies last month, raising expectations that this year's crop will be much smaller than previously thought.
"Production from a second crop is expected to be lower than earlier estimated due to the drought and that would help support the price," said one broker.
Overall volume dropped to 48 contracts of 5 percent white rice compared with 67 contracts on Friday.
The April contract ended 0.04 baht higher at 10.58 baht per kg on Monday, with the number of contracts traded rising to 29 from 22.
Open interest for the April contract was unchanged at 117 contracts.
In December the Agriculture Ministry trimmed its forecast for the second crop by nearly one million tonnes to 5.43 million, compared with 6.33 million tonnes last year.
The ministry has not updated its forecast since December.
The drought, which began in October last year, has so far affected 11 million farmers in 71 of Thailand's 76 provinces, according to the Interior Ministry.
Thai 5 percent white rice has gained 2 percent to 10.70 baht per kg in the past 4 weeks, reflecting supply concerns, brokers said.
Thailand, the world's biggest rice producer and exporter, launched rice futures last August and plans to start trading parboiled rice in August this year.
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