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10 May 2019


Prolonged Drought in 2019 May Result in about THB1 Billion in Economic Loss (Current Issue No.2991)

           As drought is projected to last until July 2019 instead of the end of May forecasted before, based on low water levels in reservoirs, especially in the central and northeastern regions, and the delay in rainfalls during June-July 2019, it is expected that the second-season rice and sugarcane, which are being harvested at this time, will be the most affected. As a result, KResearch expects that rice and sugarcane prices will likely increase steadily during the drought period, although their average prices continue to contract in 2019.  We also project that farm income, which is already low, will decline 2.1-2.4 percent YoY this year.

            However, the impacts of drought, which is expected to last for another two months, may be limited because the planting season of important crops, such as major rice, has not arrived yet. In addition, the magnitude of drought will likely decline from its peak seen during March-April while there will like be some rainfalls despite the delay foreseen during June-July. As a result, the weather condition overall will likely be dry and drought may eventually ease. It is expected that the impacts for drought will result in around THB1 billion/month in economic loss. If drought is prolonged into July 2019, the total economic loss may reach some THB17.3 billion.