Thailand farm price index surges 27.49%

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Thailand farm price index surges 27.49% 
Bangkok Post: 23 Dec 2010
November farm prices surge

The farm price index rose by 27.49% year-on-year in November, the sixth straight monthly rise, due mainly to strong food and oil crop yields.

The Agriculture Ministry said high prices for rice, maize, rubber, coconut and oil palm nuts were major contributors to a healthy index.

However, the November index of 166.98 points, measured from prices at farm sites, expanded by only 3.62% month-on-month, as the new release of paddy output pushed down rice prices.

Last month saw the price index for food and field crops such as rice, maize and cassava rise by 17% year-on-year, the oil crop index 52% and the index for perennial plants, particularly para rubber, nearly 54%.

Agriculture Minister Theera Wongsamut expects a high farm index this month thanks to continuing robust prices of oil palm and rubber following surging fuel oil use in global markets during the Northern Hemisphere winter.

An uptrend in global grain prices will give a relative boost to maize and cassava prices, he said.

Mr Theera said agricultural production declined slightly in November, by 4.2% year-on-year, due to recent rampant flooding and pest infestations, which significantly reduced rice and cassava output.

Increased production was seen in rubber, oil palm, maize and livestock.

Meanwhile, the Kasikorn Research Center forecasts strong farm prices next year in light of low production and stiff market competition.

Output for several farm products will likely decline, especially for the main rice crop and cassava.

Paddy production for the main rice crop of the 2010-11 season will decline to 21.84 million tonnes, from 22.75 million tonnes for the previous crop.

Drought and pests have been blamed for falling output, but officials hope an abundant second crop will raise overall paddy output next year to 31 million tonnes.

Cassava production is projected to shrink to 20-21 million tonnes in the 2010-11 season, down substantially from 30 million tonnes two years ago.

The lower output will lead to competition for raw materials among cassava-using sectors such as flour, pellets and ethanol. The ethanol industry may have to resort to molasses to feed production.

http://www.bangkokpost.com/business/economics/212734/november-farm-prices-surge