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NEWS UPDATES 5 July 2010

Thailand and Vietnam rice hit by drought

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Thailand and Vietnam, the world's two largest rice exporters, face severe drought conditions that threaten to severely undermine this year's crops and global supplies, Asia Times reports. Climate change and El Nino are variously being blamed for the unusually hot weather and lack of rainfall, which began with an early end to last year's tropical rainy season.

Poor weather and low rice stocks contributed to a regional food shortage scare in 2008. Then prices spiraled to more than US$1,000 per tonne and many exporting countries put in place restrictions on overseas sales to guard domestic supplies. Across Asia, rice production was expected to be up this year before signs of drought became more apparent. The possibility of a new scare is rising as crop conditions deteriorate.

For Thailand, which accounts for about one-third of global rice exports, analysts are provisionally predicting a drop of at least one million tons. On June 4, Thai officials declared 53 provinces as disaster areas because of severe water shortages. The Ministry of Interior's disaster prevention and mitigation department said nearly 6.5 million people had been adversely impacted by drought.

North and northeastern provinces have been the worst hit, and an estimated 58,300 hectares of farmland have been severely damaged, according to official statistics. In addition to rice, sugarcane, maize, cassava, rubber and fruit crops have also been impacted.

A report issued by the Thai Department of Water Resources in May showed critically low water levels in every river basin except for the central Chao Phraya River and the Mae Khlong River in western Kanchanaburi province. Critically low water levels indicate that a river is carrying less than 10% of its capacity.

Lack of rain and low water levels in feeder waterways have drained key reservoirs, with dams in the north and northeast at 32 and 34 percent capacity respectively. Several dams have halted releasing water downstream for agriculture irrigation due to consumption and electricity generation needs. Around 70 percent of Thailand's total water supply is used for agriculture.

Authorities at the Lam Takhong dam in Nakhon Ratchasima province stopped releasing water for irrigation purposes in June and the dam is now operating at 29 percent capacity. At Queen Sirikit dam, the country's largest, situated in northern Uttaradit province, water levels are at an 18-year low. Some believe that water shortages could extend into 2011.

Thailand produces about 20 million tonnes of rice annually in two or more cycles, around half of which is exported. The government also reserves about 10 percent of the harvest as a reserve to stabilize prices and stave off food shortages as a result of bad harvests.

The Thai government has asked rice farmers to put off planting the year's main rice crop for a month until rains predicted by the Thai Meteorological Department begin in July. Many farmers, however, have ignored the official advice and started planting in June in often parched conditions. They reportedly argued that the lack of water may reduce yields, but so will the shorter growing season as a result of late planting. Thailand's millions of small-scale rice farmers are particularly vulnerable.

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