BANGKOK, THAILAND — Thailand’s rice production is expected to take a hit due to drought and irrigation restrictions, according to a Feb. 23 Global Agricultural Information Network report from the U.S. Department of Agriculture (USDA).

The country’s ag sector as a whole is forecast to incur a $840 million loss in agricultural production.

A 15% drop in precipitation levels in 2019 has caused Thailand’s current water supplies to dip to 3.8 billion cubic meters, down 60% compared to the previous year. In order to preserve water household consumption and ecological management the government is limiting irrigation supplies for rice production.

The USDA is anticipating most of the losses are likely to occur in market year 2019-20’s off-season rice production, which is forecast to decline 40% to 3.2 million tonnes.

The reduced off-season rice production accounts for around 10% of total rice production. The report added that most off-season rice production is for export.

The USDA said a surge in export prices of Thai white rice were triggered with Thailand’s shrinking exportable rice supplies.

Competition from Vietnam and India are making Thai rice less competitive. The USDA expects the higher Thai white rice prices will cause a reduction of exports to 7.5 million tonnes in 2020, down 1% from 2019.