The Krung Thai Research Centre has predicted that a ‘super’ El Niño weather phenomenon may cause extensive damage to Thailand’s agricultural sector, estimated to cost more than 110 billion baht and cause a contraction of GDP of 0.51% in the worst case scenario.
The research centre said that there is an increasingly clear sign that Thailand will face a crisis from the effects of a ‘super’ El Niño, pointing out at the Southern Oscillation Index (SOI), which has dropped steadily from -11 in April to -14 in May, indicating the formation of the El Niño climate phenomenon.
Another worrisome aspect, said the research centre, is the increased frequency of the El Niño phenomenon. Thailand experienced a serious El Niño in 2015-2016, in 2009-10, in 2019-2020 and in 2023-2024, an average of every three years, making it impossible for the agriculture sector to recover.
The sector is expected to be impacted in the second half of this year and into early next year. This may cause extensive damage to agricultural output, costing about 100 billion baht in the worst case scenario, about 62 billion baht in the base case scenario and 38 billion baht in the least serious scenario. GDP loss is predicted at 0.51-0.19%.
The research centre said that rice output will be worst hit, about 9.74 million tonnes short and damage estimated at about 75 billion baht in the worst case scenario, 5.4 million tonnes short worth about 43 billion baht in base case scenario and 4.1 million tonnes short worth about 32 billion baht in the least serious scenario.
The next crop hardest hit will be sugarcane. In the worst case scenario, targets will fall short by 16.3 million tonnes, estimated at about 14/5 billion baht, 12 million tonnes worth about 10 billion baht in base case scenario and 3.6 million tonnes worth about 3.2 billion baht in the least serious scenario.
Output of tapioca is also predicted to fall by 4.2 million tonnes, worth about 10 billion baht in the worst case scenario and one million tonnes short worth about 2.5 billion baht in the least serious scenario.
The research centre said that the agricultural sector is expected to be the worst affected because it consumes 27% of the water consumed by all sectors across the country and pointed out that the amount of water stored in all reservoirs that can be utilized in the central region, according to the latest survey on June 6, has dropped to about 28%, which is below the critical level of 30%.
Apart from the water shortage, which will affect farm output, the centre said that the tendency of farmers to use less fertiliser, due to its high price following the closure of the Strait of Hormuz, means that agricultural output is predicted to drop further.
As a consequence, the purchasing power of farming families is also predicted to drop and this will put pressure on the growth rate. In a chain reaction, rice millers will also see a drop in their revenues.
The research centre has recommended that all sectors upgrade their risk management and make adjustments in line with the weather fluctuations, that farmers increase productivity, turn to plants which are drought resistant and consume less water and closely follow weather forecasts.
As far as the government is concerned, the centre suggested the development of an early warning system and the creation of a climate risk database to assist the agricultural sector in the long term.
