Supunnabul Suwannakij Bloomberg 24 Nov 10;
Thailand, the world’s biggest rice exporter, said output from the nation’s main harvest may fall below its previous estimate as the worst floods in five decades devastated crops, supporting prices of Asia’s staple food.
“This could be the worst damage to rice crops since the 2006 floods,” Theera Wongsamut, Agriculture and Cooperatives minister, said in an interview in Bangkok. Output of rough rice from the main crop, which began harvesting in October and represents 70 percent of Thailand’s total production, may fall by 7 percent from the previous year, he said.
Storms and flooding since July have destroyed rice crops in Thailand, Vietnam and Pakistan, the three biggest shippers, driving futures to this year’s high of $15.59 per 100 pounds on Nov. 9 on the Chicago Board of Trade. World food prices climbed to the highest level in more than two years in October as the cost of cereals, cooking oils and sugar surged, the United Nations’ Food & Agriculture Organization said.
Production from the main crop is estimated to decline by 1.6 million metric tons to 21.66 million tons, Theera said. That compares with the ministry’s Nov. 9 forecast of 22.34 million.
Rice futures in Chicago soared 63 percent from this year’s low on June 30 through Nov. 9 as flooding ravaged Asian crops and on speculation that dry weather in the U.S. may force the fourth-largest shipper to miss a forecast for record production. The January-delivery contract gained 0.5 percent to $13.47 at 1:02 p.m. Singapore time.
Thai rice-export prices, the benchmark for Asia, climbed to $552 a ton on Nov. 17, the highest since Feb. 17, according to the Thai Rice Exporters Association. The price is set weekly.
Growth Constraints
The flooding across two-thirds of Thailand is the worst in five decades and may slash the country’s economic growth by 0.3 percentage point this year to 7.9 percent, state planning agency the National Economic and Social Development Board said on Nov. 22.
About 11 million rai (4.3 million acres) of agricultural land, equivalent to 8.5 percent of the total, were inundated. Floods deluged approximately 8.3 million rai of rice land, equivalent to 15 percent of the total area for main-crop production, Theera said.
“About 4 million rai of rice crops are estimated to be entirely devastated,” Theera said. Actual damage levels will be finalized around the middle of December, he said.
Second-crop production, which begins in April, may rise to 9.3 million tons from 8.26 million tons last year, when drought caused by the El Nino weather pattern and the spread of planthoppers, insects that kill cotton plants and also spread disease, hurt production, he said.
La Nina
Output from the second crop will help bring the total harvest this year to 31 million tons, Theera said. That compares with 31.5 million tons last year.
“This will be adequate for domestic consumption and exports,” Theera said. The country annually consumes about 18 million tons of the grain.
The Thai floods have spread to 51 provinces since October, killing 241 people and affecting at least 8.7 million residents, according to the Department of Disaster Prevention & Mitigation. Floodwaters have receded in 37 provinces, it said.
A La Nina weather event has brought heavier-than-usual rainfall to parts of Asia this year, deluging farms and mines in Southeast Asia, driving rubber futures to a 30-year high and sending tin prices to a record. Typhoon Megi also destroyed rice crops in October in the Philippines, the world’s biggest buyer.
Global Deficit
The U.S. Department of Agriculture cut its estimate for global milled-rice output to 452.5 million tons on Oct. 8, 171,000 tons short of forecast demand. The global deficit, the first in four years, may be wider as typhoons and flooding hit Southeast Asia days after the USDA released that estimate.
Global milled output may be 450 million tons in the 2010-2011 season, 10 million tons less than previously forecast, Samarendu Mohanty, a senior economist at the International Rice Research Institute, said Nov. 9. The “supply situation is definitely very tight this year and next year,” he said.
Still, Vietnam, the world’s second-largest exporter, shipped a record 6.11 million tons from Jan. 1 to Nov. 19 because of a larger stockpile carried over from the previous year, the Vietnam Food Association said Nov. 22. That compares with shipments of 6.05 million tons for the whole of 2009.
