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20 Jul 2023


This year’s El Niño episode is expected to cause damage of around THB 48 billion to the Thai agricultural sector (Current Issue No.3424 Full Ed.)


        The onset of the El Niño phenomenon in 2023 has triggered more extreme heat and drought. This is reflected in the lower levels of water in dams and rainfall presently affecting the Thai agricultural sector. It is expected that the El Niño may cause damage to major farm products during the second half of the year when substantial amount of produce including in-season rice, cassava, rubber, maize, oil palm, and fruits are set to enter the market. Total loss is forecast to reach THB 48 billion; rice is the primary crop affected.

        Looking into 2024, the El Niño may further intensify and persist until at least March. The weather pattern could cause a significant drop in quantity and variety of affected crops, especially those planted in the dry season. Total loss for 2024 is already expected to surpass that of 2023. This is mainly due to lower yields of off-season rice which will gradually enter the market in large quantity during the first quarter. The off-season rice cultivation which is extensive in the Central region of Thailand normally generates high yields. The critically low water in dams would potentially result in tremendous loss in rice output. Also, other dry season crops such as cassava and sugarcane may see significant damage. Moreover, hot and dry weather conditions in 2024 may affect in-season rice farming in the second quarter – possibly due to limitation of plantation or decreased productivity, putting pressure on overall in-season rice yields. As a result, the overall damage to in-season and off-season rice farming in 2024 is expected to be high, with the loss figures close to or even greater than that experienced in 2005. Attention must be paid to the severity of the El Niño going forward, including the affected areas, that could have an impact on the types of damaged crops.

        As for midstream and downstream businesses that use agricultural products as raw materials, they are likely to face higher prices and shortages of raw materials at certain times. The degree of impact may vary depending on business conditions and the adaptability of each business. Thus, the operators must expedite their preparations in order to cope with uncertainty in the prices, and supply of upstream agricultural products.

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