Rice harvest in Thailand seen dropping on drought, subsidy lapse

[webfact]

Rice Harvest in Thailand Seen Dropping on Drought, Subsidy Lapse
By Supunnabul Suwannakij

BANGKOK: -- Rice production in Thailand will probably shrink to a five-year low as drought hurts yields and farmers curb planting after the end of a subsidy program, according to the Thai Rice Packers Association.

Output in the largest shipper after India may drop 10 percent to about 34 million metric tons in 2014-2015, said Somkiat Makcayathorn, the group’s president. That would be the lowest level since 2009-2010, when the Southeast Asian nation produced 32.4 million tons, according to data from the Office of Agricultural Economics, the Bangkok-based state forecaster.

While a smaller harvest would curb farm incomes, a decline in supply may ease the challenge faced by the country’s military junta as it seeks to sell off record stockpiles that built up under the now-defunct subsidy program. Dry weather may also hurt rice output in India this season, according to the Rome-based Food & Agriculture Organization, which forecasts the first contraction in global stockpiles in a decade.

“Production has been affected by both drought and the lack of a price subsidy,” Somkiat said in a phone interview in Bangkok on July 21. “The prospect of a production decline provides an opportunity for the junta to release stockpiles.”

Full story: http://www.bloomberg.com/news/2014-07-22/rice-harvest-in-thailand-seen-dropping-on-drought-subsidy-lapse.html

-- Bloomberg 2014-07-23

[trogers]

Ahhh...Adam Smith is right all along - supply, demand, and equilibrium price move the free market.

[Pib]

Helping the junta sell-off Thailand rice stock piles won't help the rice farmer this year or maybe for a couple of years in terms of rising rice prices since prices will probably remain low for another year, two or three due to excess rice supplies being sold at bargain basement prices. It's almost like feast to famine for many Thai rice farmers from the years of the PTP rice buying scheme which consumed hundreds of billions of baht of taxpayer money to the return to world market rice prices.

[Gunna]

They forgot to mention that some of the decline in production is no more rice being smuggled into Thailand from Myanmar, Laos and Cambodia to take advantage of the ridiculous high price in the Rice Scam.

Also for the same reason, extra land was planted in rice rather than other crops, plus more second crops were harvested and less time between the crops in irrigated areas.

And not sure if this years " drought " was any worse than the regular hot/dry season.

[belg]

i see a sharp increase in the price of rice, ...

after they cleared all the moldy warehouses, or thainess being, they will still try to sell that crap to the public