We, at KResearch, are of the view that ongoing flooding in many of the northern and northeastern provinces of Thailand may not significantly affect the overall agricultural output, especially rice grown during the rainy season, because the rice harvesting season has yet to arrive. This coupled with the fact that floodwaters tend to flow through rice fields in those provinces, rather than staying stagnant for too long, has led KResearch to forecast that the total rice output will reach approximately 29-30 million tons, declining 4.3-7.5 percent YoY in 2020 while rice prices may increase 3.0-6.0 percent YoY to THB11,000-11,300/tons.
Looking ahead, KResearch expects that Thailand will continue to experience tropical storms and increased precipitation between September and mid- October 2020. Close attention, therefore, must be paid to the strength of tropical storms that could hurt the major-season rice outputs because rice supplies have begun to enter the market. This factor together with the floodwaters from the north may potentially hurt the major-season rice harvest in central Thailand. In addition, southern Thailand will likely be hit by storms and heavy rain between November and December 2020, resulting in increased risk to the local production of rubber and oil palm, which are major crops grown in the southern region.