Growth of Thailand’s Agricultural Economy

(20/12/2012)

Thailand’s agricultural economy has grown by 4 percent in 2012 because of favorable climatic conditions following the flood crisis in late 2011. Minister of Agriculture and Cooperatives Yukol Limlamthong quoted a report, prepared by the Office of Agricultural Economics, that the drought situation and floods in certain areas did not cause heavy damage to the country’s agricultural sector overall in 2012. According to the report, the crop sector has grown by 5.5 percent, and major crops with increased output include rice, tapioca, rubber, oil palm, and fruit, while the production of sugar cane, pineapple, maize, and soy bean has dropped. Tapioca, sugar, and fruit exports have increased as a result of the growing demand in foreign markets. Exports of rice, maize, oil palm, and canned pineapple are on the decline. Mr. Yukol cited lower demand in the international market as a reason for falling rice exports. Another reason is that buyers have turned to Vietnam and India, where the rice price is lower than that of Thailand. The livestock sector in 2012 has grown by 3.2 percent, with more production in chicken, pork, eggs, and raw milk. Chicken, egg, and pork prices have dropped because of larger amounts available in the market, while the raw milk price is higher because of better quality. The agricultural service sector has grown by 2.9 percent, mainly due to the expansion of planting areas for major cash crops and the use of farm machinery to ease labor shortages. Production in the fishery sector has dropped by 2.7 percent, especially shrimp production, and exports to major markets, such as the United States and the European Union, have fallen since March 2012. Deputy Minister of Agriculture and Cooperatives Siriwat Kajornprasart said that Thailand had also lost some market shares to India and several countries in Latin America, where shrimp production has increased. He believed that Thailand’s shrimp production in 2012 would be 480,000-500,000 tons, worth 100 billion baht. A target has been set for shrimp production in 2013 at 500,000 tons, and new markets, such as China and countries in the Middle East, would be explored. Mr. Siriwat said that impacts from non-tariff barriers and the arrival of the ASEAN Economic Community in 2015 are likely to lead to greater competition in shrimp exports. Secretary-General of the Office of Agricultural Economics Apichart Jongskul said that Thailand’s agricultural economy in 2013 is expected to grow by 3.5-4.5 percent. The crop sector is likely to expand by 4-5 percent and the livestock sector by 1.8-2.8 percent. The fishery sector is expected to decline slightly, while the agricultural service sector is likely to expand by 2.5-3.5 percent. The Bank for Agriculture and Agricultural Cooperatives has forecast that prices of agricultural goods in 2013 would increase, as Thailand may face risks from variable climatic conditions.