DLG e.V. - Thailand business

Thai farmers optimistic about business development

The agricultural sector in Thailand was hit in 2016 by continuing droughts and heavy flooding. Flooding also resulted in massive damage to the transport infrastructure in some cases. This is also clearly reflected in the country's economic performance. The agricultural sector grew by 7.7 percent per year up to 2017. However, the effects of recent flooding in vast areas of the country last year remain to be seen.

  • Thai farmers are optimistic about business development in the coming 12 months.
  • In particular the dairy cattle farmers and cash crop producers are looking optimistically into the future.
  • Pig farmers tend to be more mixed in their assessment.

Economic situation

The majority of farmers in Thailand are satisfied with the current business environment and assess the current business environment with cautious optimism with an average of 2.61 points.

The dairy cattle farmers are more satisfied on average in this survey. They evaluate the current business environment: with 2.20 points. The dairy industry has developed dynamically in recent years and is also at the focus of public investment programmes. With regard to the expected business development in the coming 12 months as well, dairy cattle farmers are more optimistic than pig farmers and cash crop producers. The positive assessment is especially carried by the rising price of meat and rising prices for dairy products.

Arable farmers are optimistic about business development

The cash crop producers are also looking optimistically into the future and assess the expectations for further business development with a value of 2.28, and therefore somewhat better than the current situation (2.60 points). This is due to the fact that agricultural exports have increased in recent years. With a current export quota of 22 percent, the international markets are very important for Thailand's rice production. Last year approx. 11.6 million tonnes of rice were exported according to the IGC. Thailand was therefore the world's largest rice exporter after India. And the most recent export prospects for rice are stable at ten to eleven million tonnes. Rice farmers benefit from the rise in export prices for rice last year. For the main exporting countries, stable stocks are expected so that for the time being a firm price development is to be expected.

Pig farmers have varying expectations

The assessment of the current business environment by pig farmers is mixed. The majority of pig farmers surveyed assesses the situation as satisfactory. However, one-quarter of pig farmers evaluates the situation as poor. In 2017 the market for pork was characterised by an oversupply that pushed down prices. For the current year 2018, a turnaround in the pig prices is to be expected, which leads to a considerably better assessment of business expectations.

DLG-Agrifuture Insights

DLG-Agrifuture Insights is the new DLG knowledge brand and platform for international trend analyses in the agricultural sector. It examines the business environment in agriculture and agricultural business with a global panel of 2,000 leading farmers in 13 countries. Each month Agrifuture Insights will publish a "Graphic of the month" from the extensive range of development trends on the international agricultural markets.

Interested persons can obtain additional information on DLG-Agrifuture Insights from the DLG. The contact is Dr. Achim Schaffner, Head of the Economy Department, Tel.: 069/24788-321 or e-mail: afi@dlg.org. Information is also available at www.DLG.org/afi.