Farm income on road to recovery after floods

“Farm income may be better, not in negative territory,” said Mathee Supapongse, senior director of the central bank, last week.
Nominal farm income in January contracted 11.2 per cent year on year, the largest contraction since September 2009’s 12.8-per-cent decrease, after shrinking 1 per cent in December, according to the Office of Agricultural Economics and the central bank.
The decline in farm income in January came mainly from much lower agricultural prices compared to the same period last year when the prices of principal crops skyrocketed, Mathee noted.
Thailand’s agricultural prices dropped 12 per cent year on year following declines in rubber and oil-palm prices due to last year’s high base effect, he said. “In February, rubber and oil palm prices were expected to continue their contraction as their prices were very high in February last year.”
Thailand’s average raw rubber sheet price saw a 36.5-per-cent contraction year on year in January to Bt94.43 per kilogram. Palm oil price shrank 43.3 per cent year on year in January to Bt4.89 per kg.
Such consistently red figures came after last year’s severe floods, which wrecked vast areas of Thailand’s agricultural production. Agricultural production expanded 0.9 per cent in January this year.
The central bank maintains its projections about the country’s sectoral recovery after the floods. Full recovery is expected in manufacturing production in the third quarter of this year.
Estimates vary for recovery of various manufacturing sectors – automotive firms are likely to recover in the second quarter; electrical appliances in the second quarter; and hard disk drive and integrated circuits in the third quarter.
Consumption is expected to make a full recovery early in the second quarter, while a recovery in investment is likely in the third quarter.