Northern India to Endure Scorching Heat and Drought Due to Weak Monsoon

The yearly advance of the southwest monsoon is vital to both people and agriculture across India and rest of the Indian subcontinent.
The normal onset of the southwest monsoon occurs during the second half of May across Myanmar before reaching southern India at the beginning of June.
This year the monsoon was actually several days ahead of schedule reaching Myanmar, but it has stalled over the Bay of Bengal during the past week.

As a result, the onset of the monsoon in southern India will likely be up to a week late across parts of the south, but the beneficial rains are forecast to increase during the second week of June.
The heaviest rains are expected to be focused from the western Ghats to the west coast during this time. Scattered rains are expected across the southeast.
With an El Nino expected to build during the second half of the year, rainfall across central and northern India could be impacted greatly.

As a result, the northward advance of the southwest monsoon is forecast to be delayed for most of central and northern India allowing temperatures to soar well above normal for much of the month of June.
Several long stretches of temperatures over 42 C (108 F) are possible in New Delhi and the surrounding region.
Long-range forecasts are for below-normal monsoon rainfall in these areas, stretching into neighboring Pakistan. Concerns continue to rise that a drought will develop across northwest India and Pakistan as a result of prolonged dry and hot weather followed by a weak monsoon.
India is a large supplier of rice and cotton globally, and these crops could suffer greatly as a result of the impending hot and dry conditions. According to Accuweather.com Commodity Weather Expert Jason Nicholls, "Both crop yields and quality are likely to be impacted by drought later this summer in northwest India and Pakistan."

Farther south, the monsoon should arrive before the full impact of the oncoming El Nino occurs. The best chance for a near-normal monsoon will be in the southwest.
With rainfall expected to be below normal for much of India during this monsoon season, any rainfall from tropical cyclones would be increasingly important.
The Bay of Bengal will likely produce several tropical cyclones during the summer months as a near-normal season is anticipated. Although flooding is always a threat from landfalling tropical cyclones, this will be offset by the positives of rainfall during a stretch of otherwise below-normal rainfall.

Drought likely to hit rice crop Vietnam

Insufficient rainfall is likely to affect the winter-spring rice crops across the country, the National Hydro and Meteorological Forecasting Centre said yesterday. Water levels in rivers in the north-central provinces would be less than last year's average levels by about 30 per cent. Those in the country's south-central and Central Highland provinces would be about 60 per cent less than last year's averages, said centre head Bui Minh Tang. "Drought and water shortages will spread extensively," said Tang. "Southern provinces will probably have to deal with salt water intrusions." The Red River's water level stabilised at 2.85m last month, said irrigation expert Dang Duy Hien. The river's average was usually about 2.91m. If the drought continued, about 650,000ha of winter-spring rice crops in the northern delta might be ruined, he added. The Ministry of Agriculture and Rural Development had asked northern provinces to reorganise their crops according to climate forecasts and recommended farmers plant dry crops such as corn or cashews, among others, that need little irrigation, said Deputy Minister Bui Ba Bong. "We should sow up to 60 per cent of land as soon as possible to avoid drought and salt intrusion early next year," Bong said. Vu Van Thang, head of the Irrigation Department, said provinces should develop drought mitigation plans as soon as possible and dredge canals and culverts to ensure irrigation of every field. "Additional pumps should be available when river levels drop too low," he said. The Department of Cultivation head Pham Dong Quang said provinces had been asked to save irrigation water for next year.

Facts about Pakistan's key crops after floods

Massive floods in Pakistan that killed up to 1,600 people also destroyed crops over an estimated area of more than 1.6 million acres (647,497 hectares), farmers and industry officials say. The government says exact damage to crops is yet to be assessed. More damage is expected as the floods head southward. Following are some facts about the main crops. WHEAT STOCKS AND PROSPECTS FOR EXPORT Wheat stocks soared this year after a bumper crop of 23.86 million tonnes in 2009/10, and a carryover of 4.2 million tonnes from the previous crop when Pakistan harvested 24 million tonnes. In April, the government said after setting aside 1 million tonnes for strategic reserves, it still had a 2 million tonnes surplus which would be exported. But it had held back because of low prices in the international market before a recent rally. The floods have damaged up to 600,000 tonnes of wheat stocks, according to initial estimates. Traders say the country, Asia's third-largest wheat producer, still has ample stocks for export. Food ministry officials said this month wheat export was still under consideration, but the government was unlikely to make a decision until it had a complete assessment about the losses and prospects of the next crop. Pakistan banned wheat exports in 2007 because of shortages and high prices in the domestic market. COTTON IMPORTS TO GO UP Pakistan in April hoped to produce 14 million bales of cotton in the 2010/11 season, compared with about 12.7 million bales the previous financial year (July-June), when the country had to import about 2 million bales. This target is unachieveable now. The floods have damaged up to 2 million bales over an area of 700,000 acres (283,279 hectares), and traders say Pakistan will have to import up to 3 million bales to make up for the shortfall. A Pakistani cotton bale weighs 170 kg. Traders said buying will be mainly from the United States and India. Despite being the world's fourth biggest cotton producer, Pakistan annually imports between 1.5 million and 2 million bales to feed its textile industry. SUGAR DAMAGE BEING ASSESSED, IMPORTS LIKELY Pakistan has made a series of purchases in the international market this year following estimates its 2009/10 crop has produced little more than 3 million tonnes of white sugar against an annual demand of 4.2 million tonnes. Pakistan this month bought a total of 525,000 tonnes of sugar in two separate contracts. The next crop, due in November, was expected to produce about 3.8 million tonnes of white sugar before the floods struck. A farmer association official said last week the output of refined sugar would fall by 500,000 tonnes. A Food Ministry official said the extent of damage to the crop was still being assessed and it was centred in a relatively small area of about 100,000 acres (40,468 hectare) -- meaning less damage than the above estimate. Millers say Pakistan will need to import only if production falls below 3.6 million tonnes. SMALLER SURPLUS FOR RICE EXPORTS The floods have affected the rice crop over an estimated area of about 200,000 acres (80,937 hectare), which means an expected loss of about 200,000 tonnes of milled rice. A rice industry trader said the loss could be up to 15 percent of the total output target of 6 million tonnes the government had set for this year. Less output means Pakistan will have a smaller surplus for exports. Pakistan had a bumper crop of 6.7 million tonnes of milled rice in 2009/10 and exported about 4.5 million tonnes, traders say. But a U.S. Department of Agriculture attache in Pakistan said in a report last week that the country exported 3.75 million tonnes of rice in 2009/10. Attache reports are not official USDA data.Harvest of non-basmati rice begins in late September and the basmati harvest a month later.

Monsoon arrives but no decision yet on support price

The South-West monsoon has arrived in Kerala. The Met Office is sanguine about the monsoon as atmospheric conditions are said to be developing favourably. After the unkind decline in precipitation last year which resulted in sharp fall in kharif output (especially rice, coarse cereals and oilseeds), farmers are eagerly awaiting the onset of monsoon to begin their sowing operations. But the tragedy is that the Ministry of Agriculture is still grappling with a final decision on minimum support price (MSP) for kharif crops, although rains are almost knocking at the door. The anxiety in the air and among peasants is hardly shared by those in Krishi Bhawan. It is unclear what is holding up the decision and announcement. This correspondent tried to speak with no less than four senior level officials in the Ministry. Almost everyone was out attending meetings - surely not the same meeting. At least one senior official was said to be travelling. A middle-level official, who, for obvious reason should remain unidentified confessed that no decision has been taken on MSP. He was unsure when the decision would be made. Prodded to guess if the announcement about MSP would be made in the next few days, he regretted his inability to mention a timeframe. The India Meteorological Department has forecast a normal South-West monsoon for this year. The high and mighty in the Government including the Prime Minister have laid great hope on monsoon rains to augment domestic farm output and rein in food inflation.

Early Monsoon to Aid India Rice Sowing

India’s monsoon, which accounts for four-fifths of the nation’s annual rains, reached the eastern coast three days early, boosting prospects for planting of rice, cotton and corn. Monsoon has set in over parts of south Bay of Bengal, Andaman and Nicobar islands and most parts of the Andaman Sea and condition are “favorable” for further advance over the next 48 hours, the India Meteorological Department said in a statement on its website. These areas usually receive rain about May 20, according to the bureau. India’s 235 million farmers, the world’s second-biggest producers of rice and wheat, rely on the rainy season to water their crops as about 60 percent of arable land isn’t irrigated. Winter-harvested crops, including rice, corn, lentils, cotton and soybeans, are planted after the monsoon begins. “There’s optimism that a normal monsoon will lead to a rebound in agricultural output, particularly rice,” Viresh Hiremath, head of research at Karvy Comtrade Ltd. said in a phone interview from Hyderabad today. “The key to a good harvest will be the distribution of rains over the season.” Global production of rough rice, the staple for half the world’s population, will rise to a record 710 million metric tons in the 2010 calendar year, as harvests in India and the rest of Asia recover from drought, the United Nations Food and Agriculture Organization said on May 10. Still, India’s rice production may fall 10 percent for the current year to 89.3 million tons in 2009-2010 from 99.2 million tons a year earlier after the weakest monsoon in more than three decades reduced rice yields, according to the farm ministry. “El Nino is on the decline and that’s spreading optimism rains this year will be normal and certainly better than last year,” Karvy’s Hiremath said. Rains this year may be 98 percent of the 50-year average, the India Meteorological Department said on April 23. Showers may reach southern Kerala coast on May 30, the weather bureau said on May 14. The bureau, which failed to predict last year’s drought, considers rainfall to be normal if it is between 96 and 104 percent of the long-term average. Rainfall may increase over south India, Andaman & Nicobar Islands, Lakshadweep and northeastern states from May 21, the weather bureau said.

Drought destroys P8.4b worth of crops

THE damage wrought by El Niño to crops amounted to P8.4 billion, Agriculture Secretary Bernie Fondevilla said Friday. Verified reports showed standing corn crops sustained most of the damage, he told reporters at the sidelines of the Agriculture Guarantee Fund Pool awarding rites at the Bureau of Soils and Water Management. The government could not yet say if the damage would go beyond P11 billion as reported earlier. “We'll see. Should the episode worsen, we can estimate the extent of the damage and determine if there will be a need to import additional rice,” he said. The government is monitoring 14 provinces greatly affected by the drought, including Cagayan, Isabela, Nueva Vizcaya and Quirino in Northern Luzon, Bulacan and Nueva Ecija in Central Luzon, Occidental Mindoro, Oriental Mindoro, Marinduque and Romblon in the Mimoropa area or Region IV-B, Masbate in Bicol, and Antique, Guimaras and Negros Occidental in Western Visayas. Still, the department has no numbers yet for the total size of farmlands affected by the drought as well as the volume of crops that were destroyed. Over 200,000 metric tons (MT) of paddy rice was destroyed, Fondevilla estimated. The department’s Central Action Center earlier placed the damage to crops at P11.2 billion, with damaged paddy rice nearing 300,000 MT. Despite the center’s numbers for rice crops, Fondevilla said the department is sticking to its projection that paddy rice output in the first half would total 7.2 million metric tons. Paddy rice production for the second quarter will reach 3.463 million MT or 0.8 percent higher than the 3.435 MMT produced in April to June 2009. In crop survey for January, the Bureau of Agricultural Statistics said that paddy rice output in the second quarter would grow with the 1.11-percent expansion of harvested areas. It projected a harvest in 868,000 hectares of irrigated and rain-fed farms in the country. “With the demand (for palay) expected at 3.03 MMT in the second quarter, the 3.463 MMT projection is more than enough to cover our national requirement for the period,” Agriculture Secretary Salvador Salacup said. This year the Philippines will import up to 2.4 MMT of milled rice, mostly from Vietnam, to fill a possible gap in production, cover the crops damaged by typhoons late last year and the current crops felled by the drought.

S.E.Asia dry spell thins palm, rubber supply; threatens rice

A severe dry spell across a wide swathe of Southeast Asia threatens to curb output of palm oil and rubber, while the weakest rainfall in more than a decade may cripple rice planting in top exporters Thailand and Vietnam, according to a Reuters report on Thursday, March 18. The resurgence of an El Nino weather pattern in a region that is the world's biggest producer of palm oil, rice and rubber and a key supplier of coffee and cocoa has brought hotter weather to farms and PLANTATION []s, drying out trees and sapping yields. Taking the brunt of the harsh weather are Thailand and Vietnam, which together furnish half of world rice exports of about 30 million tonnes a year; some stretches of the island of Borneo and pockets of Indonesia, the world's largest palm oil producer; and even Australia is being affected slightly. Falling palm oil supplies from Malaysia and Indonesia, responsible for 85 percent of global production, could stiffen Malaysian benchmark futures , now up 45 percent from January 2009 lows. The Tokyo rubber market should climb in March, bolstered by strong demand and a sharp decline in supply, which have pushed physical prices to 58-year highs. "It looks quite severe as of now, and of course, everyone is hopeful this won't last, and the weather will be back to normal, but so far we haven't seen that," said analyst Ivy Ng of investment bank CIMB in Kuala Lumpur, who tracks palm oil firms. "If there are no rains until June, the trees will be stressed and it could have impact on production in the second half of the year or even in the first half." Poor rains in Indonesia, the world's largest palm oil producer, mean this year's output will miss the industry target of 21.5 million tonnes by about 5 percent. Neighbouring Malaysia is also likely to see production drop, just as the trade geared up for a seasonal output rebound. Planters in Malaysia's top palm oil producing state of Sabah on the island of Borneo say continuing hot weather could chip 10 percent off production this month after February's monthly slide of 15 percent. The situation is no better in peninsular Malaysia. "We only get very light showers in the morning, after that its good-bye, rain," said an official with a palm plantation in Sabah. "On the roadsides leading to the plantations, the grass is turning brown." COULD STRETCH INTO 2011 The dry weather could stretch far into 2011, analysts warned, shrinking output and supplies. "The current lag in palm oil output is due to last year's dry weather," respected analyst Dorab Mistry, head of vegetable oil trading at India's Godrej International, told Reuters. "The dry weather of 2010 will hurt production in the fourth quarter and first quarter of 2011." The situation is not too different for rubber, chiefly produced by Thailand, Indonesia and Malaysia, where the industry expects a downward revision in output as trees hit by moisture stress look likely to produce less latex. Thai rubber production in 2010 will miss a January forecast of 3.15 million tonnes by 5 percent because of the dry weather, a senior industry official said. "This year we would have around 3.0 million tonnes as the weather is expected to be very hot and dry," Luckchai Kittipol, president of the Thai Rubber Association, told Reuters. Poor rains may have spared rice in Thailand and Vietnam so far, but dry weather could force farmers to plant fewer acres with the next crop, although ample stocks make a big impact on benchmark Thai prices unlikely. Apichart Jongsakul, secretary general of Thailand's Office of Agricultural Economy, said the government had asked farmers to grow less off-season rice as key reservoir levels had dropped. "We now expect to have around 7 million tonnes of paddy rice from the second crop, down from around 8 million forecast earlier," Apichart said. MEKONG DELTA PARCHED Dryness brought by El Nino has parched Vietnam's southern Mekong Delta which could threaten planting for summer-autumn crop, the country's 2nd highest yielding crop. The world's biggest rice buyer, the Philippines, is suffering its worst dry spell since 1998, having lost more than 200,000 tonnes of paddy so far, which could drive it to import as much as 3 million tonnes of rice, officials say. Rice imports in 2010 already stand at a record 2.45 million tonnes. The situation is not ideal for the wheat crop in Australia, the world's fourth largest exporter, where the weather bureau predicts a 50:50 chance of normal rains in the crucial planting period between March and May. Rain could also be below average at the same time in the southwest of Western Australia, the country's top grain-exporting state, the bureau said. Still, Australia's second largest grain producting state, New South Wales, among those worst affected by drought in recent years, has staged a remarkable turnaround since the start of 2010, as the area officially declared in drought dropped by half. - Reuters

Philippines to cut H1 paddy rice forecast

The Philippines may cut its paddy rice output forecast for the first half of 2010 by about 3.4% to around 7 million tons as hot weather shrinks the harvest, a senior government official said on Tuesday. The latest estimate is for first-quarter output of paddy, or unhusked rice, to come in at around 3.63 million tons, lower than the previous forecast of 3.8 million tons and nearly 8% less than a year earlier, said Maura Lizarondo, assistant director at the Bureau of Agricultural Statistics. "Based on the updated Q1 forecast, the first-half estimate may be revised down to around 7 million tons from 7.25 million tons," Lizarondo told Reuters in a phone interview. This year's drier-than-usual weather, the worst to hit the Philippines since 1998, is parching farmlands. Lizarondo said it was possible the first-half forecast may be cut further as the second-quarter harvest was also likely to be hit. She said both harvest areas and crop yields had fallen. More than 200,000 tons of paddy have been lost due to the dry spell, and last month the government said a severe drought could see losses exceed 800,000 tons. The Philippines is the world's biggest importer of rice. Its 2010 imports are already at a record 2.45 million tons, and officials have said extended dry weather could see them top 3 million tons. But Lizarondo said this year's El Nino is unlikely to be as severe as the one that hit the Philippines in 1998 when rice production contracted 24%. The weather bureau has forecast a moderate El Nino condition until June, delaying the monsoon season to the second half of that month. It has forecast below-normal rainfall for April-June for most of the country, although it forecast near-normal rainfall for some parts of southern Luzon, the country's biggest island. Besides El Nino, Lizarondo said there were also reports of rat infestations in key rice-growing areas in the central part of the main Luzon island.

Thai Rice Output May Drop on Drought as El Nino Parches Region

Rice production in Thailand, the world’s largest exporter, may decline as drier-than-normal weather curbs yields, adding to signs that an El Nino may be hurting farm output across the region. “Unmilled rice output in the next crop year may fall below the average production level of 31 million tons if El Nino puts off rainfall,” Prasert Gosalvitra, head of the nation’s Rice Department, said today by phone from Bangkok. Thailand accounts for about a third of the global trade in rice. Lower production of rice from Thailand and palm oil from Malaysia caused by the dry weather may drive commodity prices higher, spurring food inflation. Asian agricultural companies including Wilmar International Ltd. may benefit from the surge, BNP Paribas SA told investors in a note today. “We’re worried that delayed rainfall will probably hurt output,” Apichart Jongskul, secretary-general of Thailand’s Office of Agricultural Economics, said today by phone. “The impact on the next crop has yet to be evaluated,” Apichart said. Thai output of unmilled rice in the year that started Oct. 1 may be between 27 million and 29 million tons, said Apichart. That’s unchanged from a forecast on Jan. 13, and 15 percent lower than the previous year’s 31.7 million tons, he said. The El Nino weather phenomenon, characterized by warmer sea-surface temperatures across the equatorial Pacific, can cut rainfall in Asia. Among the expected impacts from this month to May are drier-than-average conditions over Indonesia, according to a March 4 report from the U.S. Climate Prediction Center. ‘Driest Period’ “It’s the driest period I’ve ever seen,” Virapan Tipsuna, a 42-year-old farmer in Thailand’s northeastern province of Nongkhai, said yesterday in an interview. “It is so dry that the water supply is not enough for rice farming.” Palm oil, about 90 percent of which is produced in Indonesia and Malaysia, may surge this year as the El Nino curbs yields, analysts and traders including Prudential Bache Commodities LLC and Godrej International Ltd. warned this week. The commodity, trading today at 2,700 ringgit ($813) a ton, may jump to 3,200 ringgit, Godrej’s Dorab Mistry forecast. “Mistry’s expectations are similar to our own thesis of an extended El Nino and lower” palm oil production, BNP’s Michael Greenall wrote in today’s note, including among his top picks Indonesia’s PT Astra Agro Lestari, that country’s largest publicly traded plantations company. Astra Agro stock has almost doubled in the past year. Drought Spreads Drought is spreading in 36 of Thailand’s 76 provinces, mostly in the North and Northeast, which are major planting areas of rice and sugar, according to a statement on the government’s Web site. Water in reservoirs that can be consumed has dropped 15 percent this year, according to the Royal Irrigation Department. The Mekong River, which flows from China through five countries in Southeast Asia, is at its lowest level in 30 years near Thailand’s border with Laos, Thailand’s Department of Water Resources said yesterday. A drought in southern China, including Yunnan province, has left rivers at record lows, the Ministry of Water Resources said yesterday. Dry weather from El Nino has damaged 200,000 tons of rice in the Philippines, the world’s largest importer, Agriculture Secretary Bernie Fondevilla said on the same day. In Thailand’s Northeast, the water shortage, coupled with plant infestations, has damaged half of the rice crop, said Virapan, the farmer. “We just hope that it will rain soon and we don’t have to suffer again next year.”

Philippines May Lose 400,000 Tons Rice Output, Official Says

The Philippines, the world’s biggest rice importer, may lose as much as 400,000 metric tons from its first crop this year as an El Nino event reduces rainfall in some provinces, a government official said.

Some farmers may switch to other crops if water flows to regions distant from dams are restricted “under extreme conditions,” Joel Rudinas, acting agriculture undersecretary for operations, said in a phone interview from Manila today. The Philippines has two rice crops a year, with the 2009 first harvest yielding 7.4 million tons.

Imports by the Southeast Asian nation may jump to a record 3 million tons this year, from 1.78 million tons, if El Nino parches crops or another typhoon hits the country, National Food Authority Spokesman Rex Estoperez said in November. The country has so far secured 2.2 million tons from overseas suppliers for delivery this year, he said Jan. 8. The Philippines advanced purchases after storms slashed production in 2009.

“I think they will return to the market only in June when prices have softened,” Rakesh Singh, a trader at Emmsons International Ltd. in New Delhi, said by phone today. “It doesn’t make sense for them to enter the market at this moment because prices are already high,” he said.

El Nino, the weather pattern that can reduce rainfall or prolong the dry season in parts of Asia, also threatens to curb output in Thailand, potentially limiting the capacity of the world’s biggest rice exporter to boost shipments to meet additional demand.

The export price of the 100 percent grade-B Thai white rice, the benchmark in Asia rose 16 percent to $609 a ton in the week of Jan. 13 from last year’s low.

Rice Futures

Rice futures in Chicago rose to a record in April 2008 and the Asian benchmark export price reached its highest level a month later as the Philippines boosted imports and exporters including India and Vietnam curbed shipments, adding to concerns of food shortages that sparked protests from Haiti to Egypt.

Rough rice has jumped 25 percent in Chicago from last year’s low as the Philippines advanced imports after storms wiped out 1.3 million tons of the nation’s crops. The March- delivery contract closed at $13.975 per 100 pounds on Jan. 15. Trading is suspended today for a public holiday.

Acting Philippines Socioeconomic Planning Secretary Augusto Santos said El Nino may cause a “water crisis,” curbing the nation’s agricultural production and hurting the domestic economy, the Manila Times reported today.

Northern Luzon’s Isabela province, the nation’s second- largest rice producer, is most at risk from production losses because of the dry weather, Rudinas said.

Cloud Seeding

El Nino “at its worst” would definitely affect the Philippines rice shortfall, he said. Still, steps such as cloud seeding are being planned to boost water supply in rice areas, he said.

The water level in Angat dam, which supplies 97 percent of water in the capital region dropped 5 percent to 201.43 meters as of Jan. 13 because of El Nino, the Manila Times reported. If the decline continues, water supply from the dam to farms in Bulacan and Pampanga may be cut, the newspaper said, citing the Metropolitan Waterworks and Sewerage System.

Rice output in Bulacan and Pampanga is “sizeable,” Rudinas said, without citing volumes.

Drought hits rice harvests in Thailand, Philippines

EL NIÑO threatens to parch rice crops in the Philippines, the world’s biggest importer, and in Thailand, the largest exporter, according to officials in both countries.

“Between 20 and 30 percent of the areas planted to rice in provinces hit by El Niño are at risk of damage due to the dry spell,” Agriculture Undersecretary Emmanuel Paras said.

“That’s why we’re planning measures to counter the effects,” including spending P2 billion.’’

Thailand’s rice output might drop 15 percent to as low as 27 million metric tons in the year that began Oct. 1, from 31.65 million tons a year earlier, Apichart Jongskul, secretary general of the Office, said in Bangkok Thursday.

Lower output in Thailand may limit its capacity to boost shipments to meet additional purchases from importing countries including the Philippines, helping support global prices.

Rice futures rose to a record in April 2008 in Chicago, and the Asian benchmark export price reached its highest level a month later as the Philippines boosted imports and exporters including India and Vietnam curbed shipments, adding to concerns of food shortages that sparked protests from Haiti to Egypt.

While the US Department of Agriculture increased its estimate for this year’s global rice stockpiles, the extra supply was seen coming from India and China, which it did not forecast to increase exports.

“Unfortunately, most of these additional stocks, with the exception of Thailand, will not be available to the market in case prices start to rise,” an economist in Manila said.

El Nino May Curb Thailand, Philippine Rice Output

El Nino threatens to parch rice crops in the Philippines, the world’s biggest importer, and in Thailand, according to officials in both countries.

“Between 20 to 30 percent of the areas planted to rice in provinces hit by El Nino are at risk of damage due to the dry spell,” Philippine Agriculture Undersecretary Emmanuel Paras said in a phone interview from Manila today. “That’s why we’re planning measures to counter the effects,” including 2 billion pesos ($43.7 million) of spending, he said.

Thailand’s output of unmilled rice may drop 15 percent to as low as 27 million metric tons in the year that began Oct. 1, from 31.65 million tons a year earlier, Apichart Jongskul, secretary general of the Office, said in an interview in Bangkok yesterday.

Lower output in Thailand may limit its capacity to boost shipments to meet additional purchases from importing countries including the Philippines, helping support global prices.

If the Thai government decides to hold on to its 6 million ton stockpile, “we could see a supply shortage,” said Kiattisak Kanlayasirivat, director of Novel Commodities in Thailand, which trades about $600 million worth of rice a year.

Rice futures rose to a record in April 2008 in Chicago and the Asian benchmark export price reached its highest level a month later as the Philippines boosted imports and exporters including India and Vietnam curbed shipments, adding to concerns of food shortages that sparked protests from Haiti to Egypt.

Price Jump

The export price of the 100 percent grade-B Thai white rice, the benchmark in Asia, rose 16 percent to $607 a ton in the week of Jan. 13, from last year’s low. Rough rice futures are up 26 percent to $14.10 per 100 pounds in Chicago from last year’s low.

Importers will have to rely on exports from Thailand, the biggest shipper, after cheaper supplies from Myanmar and Pakistan dry up at the beginning of March, Rakesh Singh, a rice trader at New Delhi-based Emmsons International Ltd. said today.

Vietnam, the second-largest rice exporter “is already sold out for this crop because whatever they have, they have committed to the Philippines,” he said.

While the U.S. Department of Agriculture increased its estimate for this year’s global rice stockpiles by 1.2 million tons from a month earlier to 90.66 million tons on Jan. 12, the additional supply was seen coming from India and China, which were not forecast by the USDA to increase exports.

Philippine Provinces

“Unfortunately, most of these additional stocks, with the exception of Thailand, will not be available to the market in case prices start to rise,” Samarendu Mohanty, a senior economist at the International Rice Research Institute in Los Banos, Philippines, said in a report sent to Bloomberg News by e-mail on Jan. 10, before the USDA released new estimates.

Twenty Philippine provinces, including Nueva Ecija, Bulacan, Pampanga and Sultan Kudarat, received between 20 percent to 59 percent below-normal rainfall in the past three months, Daisy Ortega, senior weather specialist at the Philippine Atmospheric Geophysical and Astronomical Services Administration said in an interview Jan. 8.

Nueva Ecija, the largest rice producing province, Pampanga and Bulacan are located in Central Luzon which accounted for 18 percent of the national output in 2008, according to the Bureau of Agricultural Statistics Web site.

El Nino may cause water supply shortages, hurting rice planting in Thailand March through May, Apichart said. Output may further drop as insect infestation spread to other rice areas, he said.

The reduction in Thailand’s output “is quite a lot,” Chookiat Ophaswongse, adviser to the Thai Rice Exporters Association, said by phone from Bangkok today. “It will drive prices significantly higher.”

Higher stockpiles in Thailand will allow the exporter to meet its sales forecast of 10 million tons this year and keep domestic supplies stable, the government’s Apichart said.

“Until something goes drastically wrong somewhere,” prices should hold, Emmsons’ Singh said.

Thai Rice, Sugar, Rubber Output May Fall on El Nino

Thailand, a key exporter of rice, rubber and sugar, may miss production forecasts for the three commodities this year because of dry weather caused by El Nino weather event, the Office of Agricultural Economics said.

“El Nino is likely to have a severe impact on agricultural production,” Apichart Jongskul, secretary general of the Office, said in an interview in Bangkok today.

Thailand, the world’s top rice exporter, may produce 27 million to 29 million metric tons in the crop year started Oct. 1, compared with 31.65 million tons in the previous year, he said. Sugar output may total 7.3 million tons, less than 7.6 million tons forecast previously, and production of rubber may be 3.1 million tons, compared with 3.33 million tons estimated earlier, Apichart said.

Still, “the decline in production won’t have a significant impact on domestic and export markets,” he said. “Supplies will be adequate.”

Sales of sugar from Thailand, the second-biggest supplier, may rise to 5.52 million tons from 5.30 million tons in 2009, he said. Exports of rubber may rise to 2.85 million tons from 2.7 million tons, while rice sales may be 10 million tons from 8.57 million last year, Apichart said.

El Nino, the weather pattern that creates a warming of the Pacific Ocean, can reduce rainfall or prolong the dry season in parts of Asia, damaging agricultural output.