Water scarcity worsens prospects for Thailand’s rice sector

Milled rice production in Thailand in 2026/27 is forecast at 20.3 million tonnes, down 2% from the previous season’s 20.7 million tonnes. This decline will be primarily driven by a reduction in off-season rice acreage, according to a report from the US Department of Agriculture’s Foreign Agricultural Service.

Off-season rice acreage will decline from 2.1 million hectares in 2025/26 to approximately 1.9 million hectares in 2026/27, driven by risks of water shortages. Despite accumulated water reserves in reservoirs following the favorable 2025 rainy season, the Thai Meteorological Department warns of a likely return of drier weather conditions in mid-2026 amid the development of the El Niño phenomenon.

The Thai government continues to implement and expand measures to support the domestic rice market and farmers’ incomes, which will influence production and marketing decisions in the upcoming season. Domestic rice consumption is forecast to remain stable at 12.4 million tonnes. Robust demand from the food service and hospitality sectors, supported by growth in international tourism, will offset a potential decline in household consumption.

Amid increased competition from key exporters—India, Vietnam, and Pakistan—and a stronger Thai baht, Thailand’s rice exports are expected to decline by 580,000 tonnes to 7.3 million tonnes in 2025/26 and are expected to remain at this level in 2026/27.

Corn production in 2026/27 is forecast at 5.3 million tonnes (-100,000 tonnes year-on-year). Despite maintaining planted area at 1.2 million hectares, further expansion will be constrained by high production costs, stricter environmental regulations, and rising fertilizer and logistics costs associated with the conflict in the Middle East.

Corn consumption will increase by 1% to 7.3 million tonnes, driven by a gradual increase in poultry and pig production and a recovery in overall food demand. According to the Thai Feed Mill Association, feed production in the country could reach approximately 23 million tonnes in 2026, confirming a moderately upward demand trend.

Feed mills are expected to maintain or slightly increase the share of corn in their formulations, supported by stable domestic supply, competitive purchase prices for feed corn, and government support measures focused on prioritizing the use of domestic raw materials.

Wheat production in Thailand remains insignificant due to unfavorable climatic conditions, limited seed production, and low profitability. Wheat imports in 2026/27 are projected at 3.3 million tonnes, up from 3.5 million tonnes a year earlier.

Total consumption is expected to remain at 3.2 million tonnes, as the market remains mature and balanced, with moderate demand growth. Feed wheat use is estimated at 1.8 million tonnes, reflecting continued substitution in rations alongside corn, cassava, and grain by-products amid price volatility and regulatory restrictions.

According to the Thai Feed Mill Association, feed wheat remains valuable as a flexible component for feed millers during periods of short-term corn shortages or favorable global price conditions, particularly for Australian products.

Tags: crop forecast, rice, Thailand, drought