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Thailand Cuts Rice Acreage as El Niño Shrinks Water Reserves

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Thailand’s government is urging farmers to reduce acreage planted to rice after poor rainfall depleted the country’s water reserves. The move, coming on the heels of India banning much of its rice exports, is an ominous sign of El Niño’s potential impact on world food supplies. 

Thai rice prices have climbed nearly 20% since June on fears that the onset of El Niño will dry out plantations and damage crops. Thailand is the world’s No. 2 rice exporter, second to India.  

A previous El Niño during the 2015/16 crop year reduced Thailand’s rice acreage and cut year-over-year rice production by 16%, as seen in this Gro display. That strong El Niño event brought “severe” levels of drought to the country’s rice growing areas, as measured by the Gro Drought Index, which depleted irrigation supplies. 

Rice crops in China  — the world’s largest rice producer but also the biggest grain importer — also are at risk, in this case from heavy rainfall. Harbin, a key rice cultivation area in Heilongjiang province, saw the highest amount of precipitation between July 1 and August 5 in at least 20 years, as shown in this display from Gro’s Climate Risk Navigator for Agriculture. 

China’s rice is currently in the heading and flowering stage, and has poor tolerance to standing water.

Setbacks to rice production in several countries come as global rice ending stocks are forecast to decline for a fourth year in a row, as seen in this Gro display. For major rice exporting countries, the aggregated stocks-to-use ratio, a measure of available supplies, is projected to be the lowest since 2017/18.  

Total rainfall this year in Thailand’s rice growing regions is running 23% below last year’s levels, although it is still close to the 10-year average, as shown by Gro’s Climate Risk Navigator for Agriculture. Gro’s GFS forecast shows limited precipitation until at least next week. 

Thai rice farmers have already planted most of their main rice crop, though on sharply reduced acreage because of limited spring rainfall. With rice yields expected to decline, some farmers have turned to other crops such as cassava and sugarcane. 

The cyclical El Niño global climate pattern, which is forecast to continue at least through the Northern Hemisphere winter, tends to bring reduced rainfall to Southeast Asia and other areas, with negative impact for crops. In Indonesia and Malaysia, for example, palm oil yields are expected to decline in 2024, and Australia’s wheat harvest is projected to be down by double digits. 

Rice is the primary staple for more than half the world’s population, and many countries rely heavily on imported rice. Asia is the largest rice importing region — largely due to China’s use of broken rice in animal feed — followed by Africa, where Nigeria, Ivory Coast, and Senegal are the top three importers. Middle Eastern countries also are big buyers of rice.

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