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8 Sep 2020

Econ Digest

Rainstorms and rice output

The influence of the Sin Lagu and Higos storms during July and August caused continuous rain, flash flooding and floodwaters in many areas and resulted in damages in many provinces. KResearch views that the flooding in many of the northern and northeastern provinces of Thailand may not significantly affect the overall agricultural output, especially major–season rice which is the main rice output of the country, because the rice harvesting season has yet to arrive. This, coupled with the fact that floodwaters tend to flow through rice fields in those provinces rather than staying stagnant for too long, has led KResearch to forecast that the total rice output will not be affected by the aforesaid flooding.

                

KResearch views that the flooding may not significantly affect the overall rice output in 2020, and forecasts that the total rice output will reach approximately 29-30 million tons, declining 4.3-7.5% YoY in 2020, mainly due to the drought earlier in the year, while rice prices may increase 3.0-6.0% YoY to THB11,000-11,300/tons.     

KResearch expects that Thailand will continue to experience tropical storms and increased precipitation between September and October 2020. Close attention, therefore, must be paid to the strength of tropical storms that could hurt the major-season rice outputs, because rice supplies have begun to enter the market. This factor, together with the floodwaters from the north, may potentially hurt the major-season rice harvest in central Thailand. In addition, southern Thailand will likely be hit by storms and heavy rain between November and December 2020, resulting in an increased risk to the local production of rubber and oil palm fruit, which are major crops grown in the southern region.   

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