Thai Rubber, Sugar Output to Gain on Planting, Apichart Says

By Supunnabul Suwannakij

July 7 (Bloomberg) -- Damage from drought to Thai sugar, rubber and rice production will probably be limited as an increase in planting more than offsets losses from parched trees and plants, according to the Office of Agricultural Economics.

Cane output may gain 2.7 percent to 70.6 million metric tons in the year from November, while natural-rubber production may rise 2.3 percent to 3.1 million tons, Apichart Jongskul, the office’s secretary-general, said in an interview. Both the minor and main rice crops may drop, Apichart said yesterday by phone.

Thailand is the world’s biggest exporter of rice, the most important foodstuff in Asia. The kingdom is also the world’s leading rubber producer, and second-largest sugar exporter. Drought spread across 44 provinces, nearly 60 percent of the snation, with damage estimated at about 14 billion baht ($432 million), farm minister Theera Wongsamut said last month.

“Damage has been mitigated as farmers increased planting following attractive prices,” said Apichart. Rice prices may face “downward pressure” from December as the delayed main harvest starts to come onto the market, he said.

Thai 100 percent grade-B white rice, the benchmark for Asia, touched $469 a ton on June 9, the lowest level in at least two years, according to data from the Thai Rice Exporters Association. Rice futures in Chicago have tumbled 34 percent this year and traded yesterday at $9.90 per 100 pounds.

El Nino, La Nina

Drought linked to the El Nino weather pattern affected a swathe of Asia in the first half, damaging crops from China to Southeast Asia. Still, forecasters have said there may be a shift to wetter-than-usual conditions in the months ahead as a La Nina takes hold. Thailand’s Meteorological Department has said there may be heavy rain and floods in September and October.

The “drought damaged cane crops but farmers replanted, offsetting the decline,” Apichart said. The area planted to sugar cane increased 4 percent to 6.56 million rai (2.6 million acres), he said.

“Drought lowered latex output and trees in some areas are still young, generating low yields,” Apichart said, referring to the sap. The area planted to rubber has increased 12 percent to 12.1 million rai (4.8 million acres), Apichart said.

The minor rice harvest of unmilled grain that began in April and accounts for about 25 percent of annual output may fall 1.9 percent from the previous crop year to 8.26 million tons, he said. That’s less than an earlier forecast for more than 9 million tons, Apichart said.

Production of main-crop rice, planting of which has been delayed since May, will probably decline by 0.9 percent to 23 million tons, he said.

Concepcion Calpe, a senior economist at the United Nations’ Food and Agriculture Organization, said on June 29 that production of Thailand’s main rice crop may be 22 million tons in the year from October, the smallest since 2002.

The main Thai rice crop is usually planted in May, with harvesting from October. The government advised farmers on June 23 to postpone planting for a second time to the end of July because of delayed rains.

(bloomberg.com)