Rice supply threatened as Thailand wants to reduce rice cultivation

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

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

Thailand is seeing less rainfall as next year is forecast to be dry due to El Nino. Total rainfall in the central region is currently 40% below normal. Limiting rice cultivation will help ensure water for household use, Surasri said.

However, this move will also threaten global rice supplies in the context of India banning the export of some rice varieties. Thailand is currently the world's second largest rice exporter, after India.

Both the UAE and Russia recently announced a halt to rice sales abroad, just a week after a similar ban from India.

Last month, Asian rice prices hit a more than three-year high due to India’s export ban. Rice is a staple food for more than 3 billion people and higher prices could add to inflationary pressures.

“We can’t ask people to stop planting rice when prices are good. We are more concerned about the uneven rainfall in August-October that could reduce rice production during the main harvest season,” Chookiat Ophaswongse, president of the Thai Rice Exporters Association, told Bloomberg.

The Thai government has previously warned that El Nino could cause unusually low rainfall and advised farmers to plant only one rice crop this year, instead of two. However, analysts say the supply shortage from Thailand could be offset by Vietnam, which is expected to exceed its rice export target this year.

Figures from the General Department of Customs show that in the first six months of the year, Vietnam exported 21% more rice than the same period last year, with sales to the Philippines, China and Indonesia all increasing.

However, many experts believe that the amount of rice from Vietnam is not enough to meet all the demand. Even the Vietnam Food Association maintains its view that "only 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 harvests to fail in some places. Now, if the export plan is increased, the import source from India will be short because this country has banned exports, and the source of compensation from Cambodia will not be enough.

Ha Thu (according to Bloomberg)

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