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28 May 2020


Price of agricultural products in 2H20 facing worse outlook due to supply-related pressure and COVID-19 impact (Current Issue No.3114)


KResearch expects that prices of Thai agricultural products in 1H20 will continue to sustain themselves as they contend with negative factors like a severe seasonal drought (between January and April) which caused extensive damage to farm output – particularly rice, cassava and sugarcane, and the ongoing COVID-19 pandemic, events which led to an overall drop in farm output by 2.9 percent (YoY), overall farm prices are set to rise by 3.8 percent (YoY) with farm income forecast to grow within a limited range of around 1.4 percent (YoY).

​KResearch assesses that the outlook for Thai agricultural products in 2H20 may worsen compared to 1H20, with farm prices forecast to experience a double-shock  in terms of supply (where farm output reaches the market in greater volume, influenced by more accommodating weather) and demand (as the market for Thai agricultural products remains vulnerable to the impact of COVID-19). Thus, KResearch projects that the price of agricultural products in 2H20 may contract by 4.5 percent (YoY), while farm output could increase by 4.3 percent (YoY). As a consequence, farmers are poised to face greater difficulties; their incomes are expected to shrink by 0.7 percent (YoY).