The El Niño weather phenomenon is not only affecting crop production and prices but also impacting the mining and livestock industries.
A recent study released by the Trade Policy and Strategy Office suggests that drought resulting from El Niño is expected to lead to higher prices for consumer goods, energy, and inflation. It will also raise international shipping costs.
Poonpong Naiyanapakorn, the director-general of the office, expressed concerns about potential damage to Thailand’s agricultural sector and a decrease in income from agricultural and agro-industrial exports. The mining and livestock industries have also been negatively affected by the weather conditions, according to the report.
The increase in shipping costs due to the effects of El Niño adds to the economic challenges faced by the country, said Mr. Poonpong.
“The El Niño phenomenon will undoubtedly result in reduced agricultural production, leading to higher agricultural prices. However, if the reduction in production outweighs the increase in prices, it could lead to a decrease in farmers’ income,” Mr. Poonpong noted.
He further mentioned that El Niño is expected to result in reduced production of key farm crops in the 2023/24 season, including rice, maize for animal feed, oil palm, and sugar cane.
“Rice production for the 2023/24 season, in particular, is expected to decrease compared to the previous year, but it will be sufficient for domestic consumption and export,” he added.
Mr. Poonpong also highlighted the impact of food security policies in neighboring countries, such as Indonesia importing rice from India to secure supplies in case of El Niño disruptions. This situation should be closely monitored to identify trade opportunities for Thailand.
To address these challenges, Mr. Poonpong emphasized the need for Thailand to accelerate efforts to enhance the efficiency of rice production, improve crop varieties for higher yields and quality, adopt market-driven approaches, and promote innovation to increase income and maintain sustainable competitiveness.
Thailand has seen a 20.6% year-on-year growth in the value of rice exports from January through July this year.
Mr. Poonpong mentioned that the Commerce Ministry has established a war room to address the impact of El Niño on agriculture. Business operators should monitor relevant information, prepare to mitigate the effects, and plan their business operations carefully and efficiently.
The first meeting of the war room recently agreed that special measures related to the export and import of products affected by El Niño may not be necessary this year, as trade activities remain unaffected by it.
Keerati Rushchano, the permanent commerce secretary, stated that the impact of El Niño on trade is unlikely to be felt this year. However, close monitoring of rainfall and water availability during September and October will be necessary. Next year, when drought is expected, continued monitoring and, if necessary, measures related to exports and imports will be considered.
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SOURCE: http://bangkokpost.com
