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Severe drought in Thailand to raise agricultural product prices

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The ongoing drought in Thailand is expected to push up prices of many agricultural products. THE NATION

Severe drought in Thailand to raise agricultural product prices

Thailand's Department of Internal Trade (DIT) has assessed that the drought situation this year could hurt agricultural production, resulting in continued price increases.

Director-general Whichai Phochanakij said that according to the DIT assessment, it was expected that the prices of many agricultural products would increase, especially those of jasmine rice, sticky rice, and non-glutinous rice. The DIT expected that the price of jasmine rice would be stable at a higher level of 14,000-15,000 baht ($460-$500) per tonne.

As for glutinous rice, it would be priced at around 14,000 baht per tonne, while the price of non-glutinous rice would be 9,000-10,000 baht per tonne from the current 8,000 baht per tonne since the off-season rice production would be nearly half damaged, or will yield only 3.5 million to four million tonnes of paddy, from the usual of around eight million tonnes – a 50 per cent decrease.

In addition, fresh vegetable prices also will increase as the output of vegetables that require a lot of water, such as coriander and Chinese kale, will be damaged.

The DIT has suggested the cultivation of other vegetables that have similar properties but need less water to grow.

The price of lime this year could be much higher than in previous years. Therefore, the DIT has recommended that people who use a lot of limes, such as restaurants, buy them at a low price and freeze them for use during the dry season.

The price of pork is expected to rise as well because of the hot weather affecting the growth of pigs in addition to the cholera outbreak among pigs in China, Vietnam and Laos, causing the price of live pigs in China to rise to 200 baht per kilogramme and to 120 baht in Vietnam, while in Thailand it is still not more than 75 baht.

However, the DIT has discussed with the National Pig Growers Association and found that when the price exceeds 80 baht per kilogramme, there may be a measure to limit exports to ensure there are sufficient quantities for pork consumption in the country and the price does not go too high.

The price of palm oil is now rising. Fresh palm fruit is priced at six to seven baht per kilogramme, rising from last year by 2.50 to three baht per kilogramme and crude palm oil is priced at 35 baht per kilogramme from the previous 16 to 18 baht per kilogramme.

The price of bottled palm oil for consumption should now be at 42-43 baht per bottle so that the whole system of the Thai palm oil industry can be maintained, especially palm planters who have suffered from low prices for many years.

This year, when the price of palm rises, there should be opportunities for farmers. It is believed that consumers will understand this is only a short-term situation. However, consumers may turn to other vegetable oils such as soybean oil and rice bran oil or animal fat like lard oil whose prices have not increased.

Regarding concerns of the drought affecting the price of drinking water – bottled water currently retails at five to 10 baht per bottle – the DIT did not believe the drought will be so severe as to hike prices.

Relevant agencies are trying to solve problems by digging wells and finding new water sources, which should help alleviate the suffering of the people and not cause the price of drinking water to increase, including the prices of other products.

Whichai said: “From an optimistic viewpoint, the higher agricultural prices would benefit farmers from better prices but consumers may be affected in the short term. When the drought passes, agricultural prices will return to normal.

“However, with rising product prices, the department will use existing systems to solve problems, such as the more than 102,000 Blue Flag stores nationwide, bringing products from the source of production to distribute to various Blue Flag stores and reach consumers at a fair price,” the DIT director-general said.

THE NATION (THAILAND)/ASIA NEWS NETWORK

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