Thailand has been hit with what may be its worst drought in 40 years

Thailand has been hit with what may be its worst drought in 40 years, pummelling sugar production in one of the world’s biggest exporters of the sweetener.

Sugar output may tumble about 30% to 9 million-10 million tonnes, while cane output is forecast to fall below 90 million tonnes from about 130 million in the previous season because of the dry weather, according to an industry body.

“It’s worse than we thought,” Sirivuthi Siamphakdee, vice-chairman of Thai Sugar Millers Corp, said yesterday. “This will likely be our worst season in five years.”

The severe drought is adding pressure to Thailand’s struggling economy and its agricultural sector, which employs 11 million people. It may also further raise global sugar prices that have surged about 35% in the last five months on concerns that adverse weather is threatening crops from India to Mexico.

Thailand’s main economic crops — rice, rubber and sugar — are already hurting from a long period of dryness. Adding to woes are the country’s slowing exports, a delay in government budget spending and an 80% decrease in Chinese visitors, a top source of foreign receipts in an industry that makes up more than a fifth of the economy.