July 7, 2011


Thailand: High crop prices drive growth of farm sector



Strong crop prices drove the growth of Thailand's farm economy in the first half of this year to expand by 7.3% on-year, the highest rate in 10 years, Thai media reported.


The healthy growth came despite adverse effects from floods that hit 10 provinces in the South early this year and drought that damaged farm areas in the North.


The continued strong market and high production would also spur full-year growth to reach a range between 4.3-5.3%, up from an earlier projection of 1.4-2.4%, according to the Office of Agricultural Economics.


Led by robust prices of rubber, oil palm, sugarcane and cassava, the crop sector in the first half jumped by 11.1% over the same period of last year, compared with a previous estimate of only 1.6-2.6%.


The office projects that high demand for food crops around the globe, due mainly to plantation damage in many producing countries, would benefit Thai crops and push the sector to expand to between 6.5-7.5% this year, according to secretary-general Apichart Jongskul.


The first half showed healthy results although rubber and oil palm plantations in the South were partially hit by floods and mudslides.


High demand for para rubber products in the global market, especially from China, lifted the export prices of ribbed smoked sheet Grade 3 to an average THB160-THB165 (US$5.27-US$5.54) a kilogramme in the first half this year, compared with 108 baht last year.


The industry estimates that exports of rubber products this year will total about 2.9 million tonnes, up from the 2.74 million tonnes of last year.


Shipments of rice have also been on the rise since the start of the year with export volume of about one million tonnes a month, leading the industry to believe volume could hit a record 12 million tonnes this year, up from about nine million tonnes exported in 2010.


According to Jongskul, the performance of the livestock sector for the second half would improve as well thanks to favourable weather and 2.3% growth this year.


In the first half, floods, and hot weather reduced production of pigs while diseases such as Newcastle hit some chicken farms, limiting growth to 1.7%.


Floods that ravaged many shrimp farms in provinces in the South early this year, meanwhile, could have significant effects on the fishery sector.

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