"Thailand Agribusiness Report Q3 2016" now available at Fast Market Research

Thailand will maintain its status as a key Asian agricultural provider in the coming years, as the sector boasts strong export opportunities and government support , as well as an efficient food producing 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 competitive ness of Thai production compared to its Asian rivals. Rice production will face downward pressure as the government incentivises farmers to switch away from rice towards other crops, mainly sugarcane, in a bid to curb oversupply of rice. That said, Thailand will likely regain its status as the world's largest rice exporter in the coming years as production picks up aft er the drought recorded in 2015- 2016.Key ForecastsLiquid milk consumption growth to 2020: 17.2% to 1.4mn tonnes. Demand for dairy products will be robust through our forecast period, driven by rising incomes and continued interest in functional products and dairy-based confectionery, such as ice cream.Sugar production growth to 2020: 8.9% to 11.8mn tonnes. Sugar output will be driven mainly by government incentives, strong sugar cane yield improvements and improved sugar recovery from cane, as well as strong export opportunities.Poultry production growth to 2019/20: 28.3% to 2.1mn tonnes. The government is aiming to reduce the country's rice oversupply by incentivising farmers to turn to alternative crops. This will limit plantings growth in the coming years.2016 BMI universe agribusiness market value: USD37.4bn (down 0.2% from 2015, growth to average 4.9% annually between 2016 and 2020).Real GDP growth in 2016: 3.0% (up from 2.8% in 2015, forecast to average 3.7% annually between 2016 and 2020).Consumer price index in 2016: 0.3% average (up from -0.9% in 2015; forecast to average 2.1% between 2016 and 2020).Central bank policy rate in 2016: 1.50% eop (same than in 2015; forecast to average 1.80% between 2016 and 2020).Key DevelopmentsThailand is suffering from its worst drought for more than 20 years, as El Nino has severely affected South East Asia since it re-emerged in Q315. Although El Nino is currently fading and should dissipate in Q316, rainfall in Thailand has remained significantly lower than normal so far in 2016.We have revised down our production forecasts for a number of commodities as the drought will damage agricultural production in 2016. We expect output of rice, corn, sugar and coffee to decline quite significantly, reducing export supply (for rice and sugar) and domestic feed supply (for corn). Thailand will be unable to regain its former status as the largest exporter of rice, as Indian exports are likely to remain higher in 2015/16. Milk and livestock production growth will slow down.The drought adds to other challenges that the country's agribusiness sector has been facing over recent years, including low prices, oversupply (particularly of rice and poultry) and an unstable

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