Thai Floods Affect Food Prices

In Asia, Floods & Storms, Global Food Crisis, News Headlines

SINGAPORE (Reuters) – Floods have inundated farms and some rice mills in central parts of Thailand, threatening to delay at least 300,000 tonnes of exports due for shipment mainly to Indonesia and Africa this month.

Swollen rivers were hampering the movement of barges, while ships at the ports were unable to load cargoes in the face of heavy rains, three traders said Wednesday, which will push up prices of the staple that have already been supported by a government intervention scheme.

“The situation is really bad as it is raining non-stop, a lot of mills have been affected and a lot paddy which was lying around in the open or under tarpaulin has got submerged,” said one trading manager with an international rice exporter in Bangkok.

“We see it as a serious problem.”

Thailand’s prime minister warned businesses Wednesday not to take advantage of flooding around the country to push up prices as residents of Bangkok cleared supermarket shelves, worried that the capital could be swamped in coming days.

Two traders confirmed that at least 300,000 tonnes of rice exports from Thailand would get delayed, forcing buyers to seek alternative origins, such as India and Pakistan.

“Even loading for vessels which are waiting for cargo will get delayed,” said another trader from Bangkok. “It is raining heavily, so loadings have fallen and it is difficult to get cargoes alongside the vessel.”

Flood-damage to rice in top exporter Thailand comes as the nation’s new government implemented last week a scheme that gives farmers a big increase in the farmgate price, making the grain expensive for overseas buyers.

Rice prices in Thailand have started moving higher, while Vietnamese rice rose to its highest in more than three years this week because of thin stocks, the impact of flooding and speculation over additional demand.

“It will add fuel to fire because in any case the market was likely to go up as the government is due to start the intervention scheme,” the Bangkok trader said.

Thailand is racing to build floodwalls on the outskirts of Bangkok to prevent the worst floods in half a century from inundating parts of the capital later this week when water flowing from the north reaches the low-lying city.

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