Thai agricultural sector to see K-shaped growth in 2023: EIC
Thailand’s agricultural sector will see “K-shaped” or uneven growth in 2023, Siam Commercial Bank’s Economic Intelligence Centre (EIC) forecasts.
The EIC predicts that tumbling oil prices and the end of Covid controls will lead to a drop in the prices of Thai energy crops (sugar crops, oil palms), as well as para rubber.
However, Thai rice is likely to benefit from India’s rice export curb policy with higher prices and bigger shipments next year.
EIC added that favourable prices of agricultural products will contribute to a rise in sugar cane, cassava, rice, para rubber, and palm oil production in Thailand.
It predicted that shrinkage of the para rubber and palm oil industries would be balanced by the profitability of the sugar, cassava, and rice sectors in 2023 as follows:
– Rice exports value to rise 3.8%-9.2% year on year if unaffected by a global economic downturn or India’s rice export curb.
– Cassava exports to rise 5.7%, though industry faces risks from trade partners’ economic conditions, China's agricultural policy, and spotted leaf disease.
– Rice exports to expand by as much as 25.8%.
– Para rubber industry to shrink by 7.5%. Risk factors are global economic conditions and new rubber leaf disease.
– Oil palm industry to shrink. Price of crude palm oil expected to fall by 25.8% YoY in 2023. Government policies for alternatives, as well as export policies of major producers like Indonesia, should be monitored.
EIC said expansion of the Thai agricultural sector in 2023 also faces challenges from global economic uncertainty, agricultural policies of trading partners, climate change, and policies and actions to support sustainability and a low-carbon economy.
