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3 Mar 2015


Drought, 2015: Sustaining Rice Prices, Farmers May Lose THB14 Billion(Current Issue No. 2598 Full Ed.)

Drought will noticeably damage rice cultivation this year, but it will probably not be a factor that would significantly drive up rice prices. Drought might support market prices over the short-term, given that the outlook will continue to be pressured by supply-side factors, e.g., high rice stocks. In addition, drought may not alter food prices to the extent that will affect Headline Inflation.
It is expected that rural household income will remain low this year amid unfavorable agricultural product prices and drought that will likely crimp their purchasing power. Their hardships may worsen if drought persists for too long, which would also hurt the sales of related businesses.

As a result, merchants typically having farm household clientele should accelerate adjustments during the drought season by perhaps expanding their marketing channels and tapping into other customer segments that have higher purchasing power.

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