Display mode (Doesn't show in master page preview)

25 Feb 2021


Mild drought expected in 2021 though off-season rice may see decline in prices (Current Issue No.3192)


             This year's dry season (January – April 2021) is expected to be mild and will likely be less severe than 2020, based on the slight drop in dam levels by 7.3 percent YoY. So far, this decrease has been limited to reservoirs in western Thailand, whereas other regions are seeing higher water levels than the previous year.

            KResearch assesses that, while certain areas will continue to experience drought through April , it is unlikely to have any significant impact on drought-tolerant crops like off-season rice. Otherwise, such impacts would be limited and temporary. Off-season rice is projected to have a slightly higher yield (coming off the low base in 2020), inching up to around 4.4-4.7 million tons or an increase of 4.5-5.5 percent. Meanwhile, the projected price of off-season rice is only THB 8,800-9,000 /ton, or a decrease of 1.5-3.7 percent YoY. Additionally, any potential economic loss could be averted if the amount of rainfall is consistent with earlier projections. However, if rainfall is below average, Thailand could sustain an economic loss just short of THB 1 billion.

​            Nonetheless, the duration of regional droughts as well as affected areas should be monitored from time to time. Likewise, the climate for the next two months also warrants attention as the dry season persists and damaging summer thunderstorms may occur. While drought impact assessments thus far indicate that the dry spell has not significantly affected Thailand's major crops like off-season rice, ongoing droughts in central, northern and northeastern Thailand could ultimately pose a considerable threat to a majority of households whose livelihoods are already beset with difficulties ranging from low farm income to unemployment and issues presently faced by SMEs. Furthermore, the prolonged nature of the COVID-19 pandemic will be another factor weighing upon overall demand for agricultural products, resulting in only moderate growth .