Drought conditions in Thailand may cut the country's main rice crop by as much as 10 percent, the Thai Rice Exporters Association said on Tuesday. Though drought has eased in the world's second-biggest rice exporting nation, widespread dry conditions earlier this year may have had an impact on the crop, said Chookiat Ophaswong, honorary president of the Association.
The extended dry spell could cut as much as 3 million tonnes of unmilled rice from the main crop, Chookiat told Reuters. "This year's main crop output will be difficult to predict but, based on water shortages, it should affect production by about 10 percent," he said. Thailand's unmilled rice crop would come in at around 24 million tonnes, he said, against 27 million last year.
The drop in output could lend some support to benchmark Thai rice prices, which are hovering near a seven-year low due to an overhang of rice stocks built up under the previous government's subsidy scheme. Thailand has more than 15.11 million tonnes of rice in storage, of which 9.15 million can be used for consumption, the commerce ministry says.
As a result of weak global demand and the drought, the Association has said exports will likely reach 9.5 million tonnes this year, down from a previous target of 10 million. Earlier this month, the Ministry of Agriculture and Co-operative's Office of Agricultural Economics said Thailand will produce 24.14 million tonnes of main-crop rice this year, lower than its previous forecast of 26.58 million. Thai benchmark 5 percent broken rice was quoted at $390-$405 a tonne from $405 a tonne the previous day and compared with $385 a week ago.
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