Thai floods may push up global rice prices

Edited and Translated by People's Daily Online

Beijing, Nov.6 (People's Daily Online) --Thai floods will lead to short term uncertainty in the global food market as indicated in the latest Food Outlook released by the World Bank on Nov. 1.

According to preliminary estimates, the floods may have resulted in reduction of rice yield from the expected 25 million tons to 19 million tons, a drop of nearly 25 percent, said the director of the agricultural economy office of Thailand's agriculture department on Oct. 28.

The floods may also make the rice yield of the second quarter drop by 7 million tons because much seed rice was washed away in the floods. As estimated, the floods will make Thai food production fall by 16 percent to 24 percent.

Thailand is the world's largest rice exporter, and its export sales from rice account for about 30 percent of the world's total. Rice exports are among Thailand's major sources of foreign exchange earnings. Analysts said that rice price hikes in Thailand will make the world rice supplies strained and push up the price of rice on the international market.

An officer from the Rice Merchants' Association of Hong Kong, Ltd. said that the import price of Thai rice will possibly rise by 20 percent from current 1,200 U.S. dollars per ton if the floods persist. There is no doubt that rice supplies in Southeast Asia will be influenced by the floods in Thailand, which may cause further rising food prices, said Yang Razali Kassim, a senior researcher of the S. Rajaratnam School of International Studies at Nanyang Technological University in Singapore.

Analysts indicated that the underproduction of rice in Thailand due to floods will heighten Asian countries' concern with inflation and increase the pressure on them to fight it.