Thai floods may cause global rice shortage

Arab Herald Wednesday 26th October, 2011

Thailand’s flooding has wiped out as much as 14% of paddy fields, drastically reducing the export capacity of the world’s biggest rice exporter and potentially increasing global food prices.

The worst flooding in the country in 60 years has destroyed 1.4 million hectares (3.5 million acres) and as much as 7 million tons of crops, the government says.

The global shortfall equates to 4.6 million tons of milled grain, 1 million more than the surplus expected by the US Department of Agriculture.

There has already been a 13% jump to US $625 a ton this year in the Thai export price, a global benchmark, and analysts have warned it may climb a further 20% by December.

Rice is a staple food for half the world’s population and has faced constant demand growth since the end of the Second World War, putting hundreds of millions of people in danger of food insecurity if the price increases beyond what they can afford.

The UN is particularly worried about the impact of regional flooding across wider Southeast Asia on the cost of rice and other staple crops.

Flooding has damaged 13% of crop areas in Thailand, 6% in the Philippines, 12% in Cambodia and 7.5% in Laos, according to the UN Food & Agriculture Organization.