The off-season drought situation in 2019 (May-July 2019) has caused extensive damage. The influence of a mild El Nino condition has resulted in lower than normal rainfall. The amount of water in the dams remains low, adversely affecting main agricultural products such as in-season rice that farmers have already planted. Hence, the rice price is moving up, pushing the average price of rice output in 1H19 higher by 6.4 percent YoY. Nonetheless, the damage caused by lower major-season rice output this year poses challenges to the overall farm income outlook.
KResearch views that the impact from the off-season drought this year (May-July 2019) will chiefly damage the main season rice output to the tune of over THB15 billion or 0.1 percent of Thailand's GDP. Moreover, close attention must be paid to the off-season drought situation, which may drag on to August-December 2019 and affect the volume of main season rice output that normally enters the market in large quantities during the fourth quarter of the year, further increasing the economic damage.