Strong growth agribusiness Thailand foreseen

Business Monitor International (BMI) continues to foresee strong growth in these industries on the back of strong private investment.

 

Poultry Production to 2014/15: 35.6%.

BMI expects most of the production growth to stem from increased private investment in the sector.

 

Increased trading links with the region for example through the ASEAN Free Trade Area should also boost production of poultry and other livestock of which Thailand is already a major exporter of.

 

Charoen Pokphand Foods (CPF) is to expand operations rapidly in emerging markets. Main markets it is targeting are India, Russia and Turkey. It has also reportedly set aside some US$199 million for overseas investment in 2011.

 

However, it has adopted a different tactic in developed markets such as in Taiwan, where it is concentrating on acquisitions and selling higher margin food products like ready-to-eat meals.

 

BMI forecasts rice production in Thailand to rebound from 2009/10’s poor output to reach 20.7mn tonnes in 2010/11.

 

This is because damage to rice crops from droughts and floods is anticipated to be less severe in 2010/11 than it was for 2009/10.

 

Export levels in 2011 should remain the same on the back of a well-supplied market. This is reinforced by the fact that domestic stocks-to-use ratio of the grain will rise to a multi-year high.

 

Despite Thailand being the world’s second largest sugar exporter, the first half of 2010 saw fears grow of shortages on the domestic market.

 

As retail prices for the sweetener rose in the provinces, the government said it plans to extend price controls enforced in greater Bangkok to the whole country.

 

BMI believes the government’s interference in the internal sugar market through quotas and price controls are the major cause of the shortages.

 

The country faced a sugar shortage in Q4-10 once again due to higher sugar prices which prompted millers to increase exports, rather than sell sugar to the domestic market.

 

On the back of these developments, the Office of the Cane and Sugar Board has announced plans to increase the allocation for local consumption of the sweetener in 2011 to 2.5m tonnes, up from 2m tonnes in 2010.

 

The full report can be obtained from Business Monitor International