Boston, MA -- (SBWIRE) -- 03/12/2013 -- BMI View: Thailand will maintain its status of key Asian agricultural provider in the coming years, as the sector boasts from strong export opportunities and government support as well as an efficient foodproducing industry. The sugar and livestock sectors hold promising growth stories. However, the government's interference in the market, especially in the rice sector, will hinder the competitiveness of Thai's production compared to its Asian rivals. Although rice farmers will directly gain from the rice guarantee buyback-programme, we are uncertain about the long-term effectiveness of these policies in enhancing Thai food-producing efficiency as well as boosting the country's export competitiveness. Thailand will remain a key rice exporter, but may lose out to secondary exporters due to a growing instability in its trade policy.

Key Forecasts

- Poultry production growth to 2016/17: 20.7 % to 1.9mn tonnes. This growth will largely be due to increased private investment in the sector. The lift of an eight-year EU ban on uncooked imports in April 2012 will allow imports of Thai-produced poultry and other food products and give the industry more impetus to expand production.
- Milk production growth to 2016/17: 28.3% to 1.3mn tonnes. Dairy herd expansion and yields improvements will support growth.
- Rice consumption growth to 2016/17: 20.3% to 12.5mn tonnes. Rice will remain the staple food for Thais, and there is little opportunity for substitution. Thais are more likely to cut non-essential items such as meat and soft drinks when economic times are tough.
- BMI universe agribusiness market value: 22.4mn in 2013; growth to average 4.2% annually to 2016/17.
- Real GDP growth in 2013: 2.9% chg y-o-y; down from 3.3% in 2012, forecast to average 2.8% to 2017.
- Consumer price index in 2013: 2.9% average; down from 3.3% in 2012; forecast to average 2.8% from 2012 to 2017.

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Key Revisions To Forecasts

- Sugar production forecast revised down, to 9.6mn tonnes (compared with a previous forecast of 11.0mn tonnes). Thai sugar supply prospects are deteriorating due to poor rains during the sugarcane growing season (June-July), followed by the recent slowing down of sugarcane crushing on the back of heavy rains.
- Rice production forecast revised down, to 20.7mn tonnes (compared with a previous forecast of 21.2mn tonnes). Particularly dry weather in the north east region during the main crop growing season (May-October) hampered yields and damaged planted area.

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