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Thailand Agribusiness Report Q3 2009Published by: Business Monitor International Published: Jun. 19, 2009 - 67 Pages Table of Contents
AbstractIn BMI's Thailand Agribusiness Report for Q3 2009 we introduce the new Coffee Outlook. WhileThailand's coffee production has fallen in recent years, and is expected to keep doing so, consumption isrising rapidly making the country more reliant on imports.Thailand really has two coffee sectors. The vast majority of the coffee crop is of the robusta variety and isproduced in the Upper South of the country with more than half of total production coming fromChumphon province. The plantations are mainly smallscale and trees are often old and unproductive. Robusta production in Thailand is no longer competitive when compared to Vietnam and Indonesia. Other cash crops such as rubber and oil palm have also offered far better returns over the past few years.We therefore expect production to decline over our forecast period as plantations are changed to othercrops. Thailand has already become a net coffee importer in the last few years. Imports of coffee fordomestic use, mainly as soluble instant coffee, will rise rapidly in years to come. The other sector, in the mountainous provinces of the North, is faring much better. In the provinces ofChiang Mai, Chiang Rai and Mae Hong Son production of arabica coffee has been growing strongly. Though in 2009 production is expected to reach only 74,850 bags, compared to national coffee productionof 890,000, this is a large increase from only 42,183 in 2005. With many newly planted trees still tomature, this figure will increase rapidly in the coming years. The hill tribe coffee, as it is often marketed, is aimed squarely at the premium speciality coffee marketboth in Thailand and abroad. The rising awareness of arabica coffee from northern Thailand has beengreatly helped by tourism in the region, with trips to hill tribe villages where coffee is produced a popularattraction. While demand is likely to fall this year owing to the contraction of the Thai economy and thefall in tourist numbers, in the longer term we see northern coffee production developing into a profitablesmall-scale industry. The performance of Thailand's agricultural sector will be even more vital to the overall health of theeconomy than usual this year. With manufacturing exports hit hard by the worldwide recession andopposing groups of protesters doing their best to scare off tourists, the agricultural sector could be the oneray of sunshine in the overall gloom. The sector will not survive the slowdown unscathed however. While exports of rice and sugar areexpected to hold up well, revenues from palm oil and rubber will be well down. The falling prices ofagricultural commodities has also brought farmers out onto the streets to demand help from thegovernment. The rising protests are posing difficult decisions for the government of Prime Minister Abhisit Vejjajiva.As shown by the recent chaos in Bangkok and Pattaya, the government is seriously lacking in legitimacyin large areas of the country's rural heartlands in the North and North East. Democrat Party leaders will bedesperate to satisfy farmers' demands and thereby keep them in the fields and off the streets of Bangkok. Conversely, however, is the need not to jeopardise the competitiveness of Thailand's agricultural exportsat a time when export revenues are plummeting. Rice exporters are already warning that targets may bemissed owing to the high price of Thai rice which is supported by government intervention schemes. Get Full Details About This Report >> |
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