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20 Mar 2023


Thai rice and cassava prices projected to increase during 2023 in line with stronger demand driven by China’s reopening (Current Issue No.3391)


        In 2023, we at KResearch expect that prices of Thailand’s major agricultural products will be supported by China’s reopening to a certain extent, thus helping offset the risk stemming from the global economic downturn. Prices of several Thai agricultural products may increase, while other may decline, depending on prices in global markets. It is expected that rice and cassava prices will rise over those reported in 2022, driven by stronger demand, which is caused primarily by China’s reopening. Concern towards food security may drive up the Thai rice price to roughly THB11,100/ton, an increase of 7.5 percent, and the cassava price to THB3/kg, an increase of 17.6 percent. Meanwhile, although rubber, oil palm and sugarcane prices may remain relatively high in 2023, they will likely decline from those recorded in 2022, as a result of higher supplies bolstered by bumper crops amid favorable climate conditions. It is expected that the rubber price will stand at THB45/kg, a decline of 13.0 percent, the oil palm price at THB5.4/kg, a decline of 31.1 percent and the sugarcane price at THB1,000/ton, a decline of 3.3 percent.  
        Prices of most agricultural products will likely remain relatively high in 2023 because of  uncertainties surrounding their supplies. Among these are low cereal stocks globally, erratic weather, geopolitical issues, export restrictions of many countries, plant diseases and high volatility seen in farm production costs. Additionally, looming sustainability issues in Thailand’s key trade partners (especially European countries and the US) may present challenges to Thai downstream businesses that are using crops as their raw materials. These include the need to put in place an efficient cost or inventory management during a certain period of time, seek a stable supply of raw materials at low costs, and find substitutes for their raw materials.