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3 Apr 2023

Econ Digest

Thai rice and cassava prices projected to increase during 2023, supported by demand from China’s reopening

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        In 2023, KResearch expects 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 others 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 and concern towards food security. These factors may drive up the Thai rice price to roughly THB11,100/ton, an increase of 7.5%, and the cassava price to THB3/kg, an increase of 17.6%.
  • 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. As these agricultural products are used in the industrial sector and for energy production, their prices may be dragged by the impact of the global economic slowdown and downward fluctuations in oil prices. It is expected that the rubber price will stand at THB45/kg, a decline of 13.0%, the oil palm price at THB5.4/kg, a decline of 31.1% and the sugarcane price at THB1,000/ton, a decline of 3.3%.  

        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. As a result, businesses need to plan for efficient cost management.

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