Reuters/Singapore/Hanoi


An aerial view of a flooded temple at Wat Chaiwatthanaram, a Unesco World Heritage Site, in Ayutthaya province, nearly 80km north of Bangkok yesterday

Thailand’s worst floods in half a century have inundated farms and mills, squeezing rice supplies from the world’s top exporter, while rival Vietnam is expected to default on half a million tonnes as prices of the staple climb.
Flood-damage to Thai rice comes as the nation’s new government implemented a scheme that gives farmers a big increase in farmgate prices, raising concerns over food inflation among buyers in Asia, the Middle East and Africa.
Swollen rivers were hampering the movement of barges, while ships at the ports were unable to load cargoes in the face of heavy rains, traders said yesterday, adding that at least 300,000 tonnes of rice exports would get delayed, forcing buyers to seek alternatives such as from India and Pakistan.
“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 a trading manager with an international rice exporter in Bangkok.
“We see it as a serious problem.”
The floods have already prompted the government to reduce its estimate of the main rice crop to 21mn tonnes from 25mn for which the harvesting was due to start this month.
“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.”
Thailand’s prime minister warned businesses 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.
 At least 281 people have been killed by heavy monsoon rain, floods and mudslides since late July and 26 of Thailand’s 77 provinces are inundated, said the Department of Disaster Prevention and Mitigation.
The north, northeast and central plains have been badly affected and Bangkok, which is only 2m above sea level, is in danger as water overflows from reservoirs in the north, swelling the Chao Phraya river.
But the floods have limited impact on sugar output, Thailand’s other major export, with about 200,000 rai of cane plantation hit, said the Office of the Cane and Sugar Board, accounting for 2-3% of the 8.7mn rai of plantation estimate for 2011/12 production.
The export price of Thai benchmark 100% B grade white rice rose to $670-$680 a tonne last week from $650, while Vietnamese rice climbed to its highest in more than three years on thin stocks and expectations of higher demand.
Yesterday Vietnam’s 5% broken rice stood at $575-$590 a tonne, FOB, against $575-$580 a week ago. It touched $580-$590 on Monday.
Vietnam, the world’s second-largest rice exporter, could default on deliveries of 520,000 tonnes of the grain this year as exporters failed to buy on domestic markets for loading due to a price surge, a state-run newspaper reported.
The projected defaults would account for 7% of Vietnam’s annual export volume forecast at 7.5mn tonnes this year, breaking the record of 6.83mn tonnes in 2010.
The market is expecting higher rice demand in 2012 from the Philippines, where the volume of unmilled rice damaged by two recent typhoons has climbed to about 1mn tonnes, a senior agriculture official said.
“The price is rising to intercept the Philippines’ demand,” a Vietnamese trader in Ho Chi Minh City said. “The Philippines will buy for next year, following the impact of storms and floods and a decline in stocks.”