According to the Thai Meteorological Department, rains are forecast to improve over much of the country with the onset of the monsoon season in late May. This is expected to benefit planting operations particularly in the rainfed northern and northeastern regions, which account for the bulk of main season output. Despite an improved forecast for the monsoon season, water levels in the main reservoirs remain significantly constrained following precipitation shortages endured since 2014, which are associated with the prevailing but currently weakening El Niño episode. This has prompted the government to encourage farmers to delay plantings in irrigated perimeters until adequate monsoon rains arrive and reservoirs are recharged. These factors, combined with comparatively subdued farmgate prices since the discontinuation of the paddy pledging program in 2014, as well as government efforts to promote a shift away from rice cultivation, are expected to limit large expansions in plantings in the 2016 season. Therefore, FAO tentatively projects aggregate paddy production in 2016 at 30.3 million tonnes, up 6%from the 2015 drought reduced output but still well below the abundant harvests gathered between 2011 and 2013, when output grew in response to high intervention prices offered under the paddy pledging program.
The 2016 maize crop is forecast at 4.7 million tonnes, slightly above last year’s reduced output but still below average. Although the persisting dry conditions are expected to limit production again in 2016, assuming a return to more normal weather, plantings and yields are tentatively forecast to recover partially from the previous year’s low levels.
FAO’s latest forecast for the 2015 secondary season rice crop, currently being harvested, stands at 4.2 million tonnes, 26% below the already reduced output of the same season in the previous year, and almost two thirds below the average of the previous five years. This is mainly the result of significant planting reductions, due to the prolonged dry weather (that are associated with the prevailing, but currently weakening, El Niño episode), coupled with extreme low irrigation water availabilities. Similarly, the 2015 main season rice crop, already harvested, was also affected by the severe dryness and is estimated to have decreased by 7% to 24.5 million tonnes. As a result, the 2015 aggregate paddy production is forecast at 28.7 million tonnes, 14% down from the 2014 already reduced level.
Despite a decrease in the 2015 rice production, rice exports in 2016 are forecast at 9.9 million tonnes, slightly above the 2015 level, sustained by continued sales of rice from government reserves.
Domestic rice prices increased in April and were higher than a year earlier, mainly supported by prospects of the drought reduced 2015 secondary season harvest. Continuing export sales to traditional buyers also contributed to the upward pressure on prices.