KResearch assesses that southern rubber and oil palm growers may lose approximately THB6.6 billion in income due to the impact of flooding from December 2020 to March 2021. A shortfall of around 0.58 million tons in both rubber and oil palm outputs is expected after floods have wrecked havoc on rubber and oil palm trees.
The above figures may not affect the overall Thai economic performance because those losses account for only 0.04 of GDP. However, flooding will inevitably hurt southern households, which are already experiencing hardship quite substantially in terms of income. Their income could be threatened further by an expected decline in rubber and oil palm prices as supplies will gradually return to normalcy after flooding has eased. In addition, bleak rubber and oil palm export prospects due to the ongoing COVID-19 pandemic will likely cause prices to trend lower. Therefore, it is timely for the government to implement phase 2 of the income guarantee scheme for rubber and oil palm growers as this program can help sustain farm income in Southern Thailand.
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