Thailand, the world’s second largest exporter of rice, is encouraging its farmers to plant much less of the crop in a bid to avoid wasting water — a transfer that would roil rice markets additional following India’s export ban.

Thailand is dealing with a spate of low rainfall. In an effort to preserve water for consumption, the Workplace of the Nationwide Water Assets (ONWR) has known as on the nation’s farmers to show to “planting crops that use much less water [which] will be harvested rapidly.”

“The cumulative rainfall is about 40% lower than regular, which is at excessive danger of water scarcity,” secretary-general of the ONWR, Surasri Kidtimonton, mentioned in an announcement launched by Thailand’s Nationwide Water Administration.

Kidtimonton mentioned the nation’s water administration must “give attention to water for consumption,” in addition to “water for cultivation primarily for perennial crops.”

Perennial crops are crops that develop again after harvest and needn’t be replanted yearly, not like annual crops. Rice is categorized as an annual crop.

For each kilogram of tough rice grown, a mean of two,500 liters of water is required. As compared, various crops like millets require between 650 to 1,200 liters of water for a similar quantity harvested.

Simply final month, India banned exports of non-basmati white rice, a transfer aimed toward guaranteeing “satisfactory availability” in home markets, the federal government mentioned.

India is the world’s main rice exporter and accounts for 40% of worldwide rice commerce, and the ban is anticipated to have an effect on tens of millions.

“World rice value may have the potential to extend additional within the occasion that rice manufacturing in Thailand decreases considerably 12 months on 12 months,” Rabobank’s senior analyst Oscar Tjakra advised CNBC.

Nonetheless, it nonetheless stays to be seen whether or not Thai farmers will comply with the directive, mentioned Tjakra.

“Thai farmers would possibly nonetheless select to plant rice on the again of the present excessive world rice export costs setting,” he mentioned.

Rice costs are already hovering at decade highs, partially resulting from tighter provides when the staple grew to become a sexy various as costs of different main grains surged following Russia’s invasion of Ukraine in February 2022.

“Thailand typically pushes for water conservation, but it surely has little impact on the usage of water because the water rights system has but to be developed,” mentioned Jeremy Zwinger, CEO of The Rice Dealer advised CNBC in an e-mail.