Rice production in Thailand, the world's biggest exporter of the grain, may fall by at least 1.5 million metric tons after the nation's worst floods in five decades inundated key rice-growing areas, a state agency said.

Output from the nation's main rice crop may decline from last year's 23 million tons, Prasert Gosalvitra, head of the Rice Department, said by phone from Bangkok today.

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Thailand's government halted sales of rice from state stockpiles because of concern that floods will damage crops and reduce production of the grain, deputy government spokesman Marut Masayawanit said at a briefing today.

Eoin Treacy's view As the largest rice exporter, how Thailand manages its harvest has a very distinct impact on poor people in importing nations such as the Philippines. With the loss of such a high proportion of Pakistan's crop and now problems with the Thai crop, prices for the commodity remain on an upward trajectory.

Rough Rice has been a laggard among the food grains and beans but has put in an impressive catch-up performance recently. It found support in the region of $10 from July and hit $15 today following 10 consecutive weeks to the upside. It is a little overextended in the very short-term, as it approaches the 2-year highs near $16, but a sustained move below the 200-day MA, currently near $12.50 would be required to question medium-term side potential.