Rice supply is threatened as Thailand seeks to reduce rice cultivation.

Thai authorities urging farmers to reduce rice cultivation to conserve water is threatening global rice supplies, amid India's export ban.

In Thailand, rice is primarily grown in the central region. However, according to an announcement from Surasri Kidtimonton, Secretary-General of the National Water Resources Office, the government is encouraging people there to switch to growing other crops that require less water.

Thailand is experiencing a drop in rainfall amid forecasts of dry weather next year due to El Nino. Total rainfall in the central part of the country is currently 40% below normal. Restricting rice cultivation will help ensure water for household use, Surasri said.

However, this move would also threaten global rice supplies, given India's ban on exporting certain types of rice. Thailand is currently the world's second-largest rice exporter, after India.

Both the UAE and Russia recently announced they would stop selling rice abroad, just a week after India imposed a similar ban.

Last month, rice prices in Asia reached their highest level in over three years due to India's export ban. Rice is currently a staple food for more than 3 billion people. The rise in its price could increase inflationary pressure.

"It's impossible to ask people to stop growing rice when prices are good. We're even more concerned about the uneven rainfall during August-October potentially reducing rice yields during the main harvest season," Chookiat Ophaswongse, president of the Thai Rice Exporters Association, told Bloomberg.

Previously, the Thai government had warned that El Nino could cause unusually low rainfall and advised farmers to plant only one rice crop, instead of two, this year. However, analysts suggest that the supply shortage from Thailand could be offset by Vietnam. Vietnam's rice exports are projected to exceed targets this year.

Data from the General Department of Customs shows that in the first six months of the year, Vietnam exported 21% more rice than in the same period last year. Sales to the Philippines, China, and Indonesia all saw significant increases.

However, many experts believe that the amount of rice from Vietnam is not enough to meet all demand. Even the Vietnam Food Association maintains its stance that "a maximum of 6.5 million tons of rice should be exported this year." The reason is that Vietnam is also affected by climate change, causing rice crops to be damaged in some areas. Now, if export plans are increased, imports from India will be short due to that country's export ban, and the compensatory supply from Cambodia will not be sufficient.

Ha Thu (according to Bloomberg)

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