Thailand faces worst floods in years as crops damaged

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Thailand faces worst floods in years as crops damaged

Thailand is battling the worst floods in years with a large area of its crop land inundated by seasonal storms and swollen rivers, which is threatening to fuel food prices and hinder a nascent tourism recovery.

Many popular tourist destinations such as Bangkok and Chiang Mai in the country's northeast have reported flooding of streets this week after heavy rains triggered by typhoon Noru saw water level in the Chao Phraya and Ping rivers rise. An estimated 1.2 million rai 160,000 hectares of agricultural land were damaged by flooding, with more than 82,000 houses damaged across 510 districts in 72 provinces, according to official data.

With more storms forecast over the next few weeks, Thai officials are trying to minimize damage to crops and houses with Prime Minister Prayuth Chan-Ocha going to the northeastern provinces on Tuesday to oversee relief efforts. The premier pledged to protect the economy and low income households that were hit by the floods.

The biggest damage is to rice crop and it comes amid forecasts for smaller harvests from major producers such as India and Pakistan, which were hit by a devastating flood this year. The flooding, damage to the crop close to the harvest period and high fertilizer prices will cause Thailand s main rice harvest to drop about 9%, according to Kasikorn Research Center. Weather department data showed that Thailand received about 24% above average rainfall between Jan. 1 and Sept. 25, Kasikorn said.

The report said that the flood impact will hit households that are already vulnerable due to low purchasing power, high costs of living and high household debt.

A country that has battling the highest food inflation in over a decade may be bad news because of a lower rice output and damage to vegetable and fruit harvests. The hit to agriculture adds to the growth, such as high fuel and electricity prices and a weak baht, according to Tim Leelahaphan, Bangkok-based economist at Standard Chartered Bank.

Tim said that the possibility of a flood impact for Thailand could be a tail risk that could emerge in the next quarter or two. We need to monitor whether it will affect manufacturing or result in rate cuts. Any potential impact on tourism, which we hope would recover in the next quarter or two, will be a new lesson for Thailand this time, especially since it is the hope for the economic recovery next year. The Tourism Authority of Thailand is monitoring the impact of floods in some key tourist destinations and it has not seen major disruptions yet, said Yuthasak Supasorn, governor of Thailand.

The expected arrivals from Europe and the US shouldn't be affected in the winter season, Yuthasak said. There hasn't been a report on cancellations of bookings due to the floods. Thailand, a major producer of rubber and sugar, is often ranked among the world s most vulnerable to climate change. Some regions suffered severe droughts in the past decade, while the country was battered by flooding in 2019 and 2011 and in the past decade.

On Tuesday, Bank of Thailand Governor Sethaput Suthiwartnaruep said that the revival in tourism will ensure Southeast Asia's second-largest economy will expand next year. The central bank said the impact of floods needs close monitoring.

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