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Thailand - Drought threatens major crop harvests

Severe drought predicted for this year is estimated to cause 15.3 billion baht worth of damage mainly from low productivity of offseason rice and sugar cane crops during the summer, knocking 0.1% off GDP, according to the Kasikorn Research Centre.

Summer, which officially began on Feb 21, is predicted to be hotter by 1C-2C and last longer than last year. There could be less rainfall to maintain irrigation and consumption, with rainfall in dams and reservoirs nationwide expected to drop by 13.5% from last year.

Lower levels of rainfall than last year have flowed into reservoirs and dams in the Northeast and the Central Plains provinces, raising concerns about a critical water shortage in some parts of the two regions at the height of summer next month, the centre said.

If there is no significant amount of rainfall to boost levels in the reservoirs, the drought could last longer than last year, hitting major crops due for harvest in the next few months.

Off-season rice and sugar cane production may have to bear the heaviest brunt, the centre said.

The Northeast is the biggest producer of sugar cane, accounting for 43.5% of nationwide output while the Central Plains provinces grow the most off-season rice, at 47.8% of the entire country’s volume.

Off-season rice, harvested mostly during the drought-affected months of March and April, amounts to 23.5% of the country’s rice productivity.

Even though water shortage drives down crop yields and depresses supplies to the market, the lower supplies might not necessarily push up overall prices because the off-season rice makes up only a quarter of the nationwide rice output, the centre said.

On average, rice prices are predicted to fetch between 10,650 and 10,740 baht per tonne, shrinking by 0.8-1.7% from last year.

The centre said the drought’s impact is likely to be limited to certain crops in specific areas of the Northeast and the Central Plains provinces. Nonetheless, it may well lead to the overall farmers’ income contracting by between 1.2% and 1.6% from last year, up from the initial projected contraction of between 0.4 and 0.8%.

The centre estimated an economic loss from off-season rice and sugar cane damage at 15.3 billion baht, or about 0.1% of GDP. However, the figure could grow depending on water shortages.

Source –

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