Rice markets could face further turmoil as Thailand urges farmers to plant less rice

Thailand, the world's second largest exporter of rice, is encouraging its farmers to works little of the harvest successful a bid to prevention h2o — a determination that could roil atom markets further pursuing India's export ban.

Thailand is facing a spate of debased rainfall. In an effort to conserve h2o for consumption, the Office of the National Water Resources (ONWR) has called connected the country's farmers to crook to "planting crops that usage little h2o [which] tin beryllium harvested quickly."

"The cumulative rainfall is astir 40% little than normal, which is astatine precocious hazard of h2o shortage," secretary-general of the ONWR, Surasri Kidtimonton, said successful a statement released by Thailand's National Water Administration.

Kidtimonton said the country's h2o absorption needs to "focus connected h2o for consumption," arsenic good arsenic "water for cultivation chiefly for perennial crops."

Perennial crops are crops that turn backmost aft harvest and request not beryllium replanted each year, dissimilar yearly crops. Rice is categorized arsenic an yearly crop.

For each kilogram of unsmooth atom grown, an average of 2,500 liters of h2o is needed. In comparison, alternate crops similar millets necessitate betwixt 650 to 1,200 liters of h2o for the aforesaid magnitude harvested.

Just past month, India banned exports of non-basmati achromatic rice, a determination aimed astatine ensuring "adequate availability" successful home markets, the authorities said.

India is the world's starring atom exporter and accounts for 40% of planetary atom trade, and the prohibition is expected to affect millions.

"Global atom terms volition person the imaginable to summation further successful the lawsuit that atom accumulation successful Thailand decreases importantly twelvemonth connected year," Rabobank's elder expert Oscar Tjakra told CNBC.

However, it inactive remains to beryllium seen whether Thai farmers volition travel the directive, said Tjakra.

"Thai farmers mightiness inactive take to works atom connected the backmost of the existent precocious planetary atom export prices environment," helium said.

Rice prices are already hovering astatine decennary highs, successful portion owed to tighter supplies erstwhile the staple became an charismatic alternate arsenic prices of different large grains surged pursuing Russia's penetration of Ukraine successful February 2022.

"Thailand often pushes for h2o conservation, but it has small effect connected the usage of h2o arsenic the h2o rights strategy has yet to beryllium developed," said Jeremy Zwinger, CEO of The Rice Trader told CNBC successful an e-mail.