Thailand - Country Commercial Guide
Agriculture

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2021-08-15

Overview

Agriculture accounts for only six percent of GDP in Thailand but the sector employs around one-third of the country’s labor force. Thailand is the world’s largest exporter of tapioca products, rubber, frozen shrimp, canned tuna, and canned pineapple.

Thailand was the 15th largest export market for U.S. agricultural products (including seafood and forestry products) and the 10th largest supplier to the United States of agricultural imports in 2020. According to U.S. Departmetn of Agriculture reports, U.S. exports of agricultural and related products to Thailand in 2020 decreased by two percent, from about $1,940 million in 2019 to $1,896 million due to reduced exports of bulk commodities and consumer-oriented products caused by the COVID-19 outbreak. U.S. exports of bulk commodities, accounting for 46 percent of all U.S. agricultural exports to Thailand, declined four percent in 2020. Cotton saw the largest decline falling 44 percent, which more than offset an increase in soybean and wheat exports. Consumer-oriented products, which accounted for 21 percent of all U.S. agricultural exports to Thailand, also declined three percent following reduced exports of food preparations, fresh fruit, processed vegetables, tree nuts, and pet food. Intermediate products, which accounted for 27 percent of all U.S. agricultural exports to Thailand, increased slightly due mainly to the recovery in distiller’s dried grains with solubles (DDGS) and feed ingredients exports, accounting for around 60 percent of U.S. intermediate product exports to Thailand.

Thailand has high tariffs on agricultural imports with the bound tariff rate averaging 39 percent ad valorem. This presents a significant impediment for U.S. agricultural exports, particularly for consumer-oriented products like dairy products, meats, fresh fruit, snack foods, processed vegetables, and pet foods. Other U.S. competitors face lower tariffs than the United States due to free trade agreements with Thailand (e.g., Australia, New Zealand, Japan, and China). Non-tariff trade barriers include non-transparent tariff-rate-quota administration, arbitrary import permit controls, and food standards that are not harmonized with international standards.

United States imports of Thai agricultural fishery and forest products in 2020 increased by nine percent to $4,236 million from $3,867 million in 2019. Consumer-oriented products accounted for the largest share of U.S. agricultural product imports from Thailand in 2020 at 43 percent, followed by seafood products 33 percent, bulk commodities 18 percent, intermediate products four percent, and forest products two percent, respectively

Table: Thailand’s Agricultural Sector (Millions USD)

 

2018

2019

2020

2021 (estimated)

Total Local Production

41,459

44,286

43,379

44,250

Total Exports

39,509

38,847

37,883

38,640

Total Imports

17,562

17,450

18,039

18,400

Imports from the U.S.

2,233

1,940

1,896

1,930

Total Market Size

19,512

22,889

23,535

24,010

Exchange Rate

32.31

31.05

31.29

31.50

(total market size = (total local production + imports) – exports)

Leading Sub-Sectors

Leading sub-sectors include textiles, wheat milling, soybean crushing, animal feed operations as well as the hospitality industry, food retailing, and food processing.

Opportunities

Thailand is a growing destination for U.S. agricultural exports due to the expanding economy (with the exception of COVID impact), increasing consumer incomes, changing lifestyles, and the growing, vibrant tourism industry. The economy is expected to grow by two percent in 2021, a slow recovery from a negative six percent economic growth in 2020. The economic growth in 2021 will be driven by the export sector, which is expected to grow by 17 percent. Thailand’s processed food industry is growing rapidly and relies on imported ingredients for food and feed production.

Best market prospects for U.S. agricultural exports include soybeans, soybean meal, cotton, DDGS, protein for animal feed, wheat, meat and meat products, dairy products, fresh fruit, dried fruits, nuts, starches, dehydrated potatoes, food additives, colorings, flavorings, juice concentrates, and other baking ingredients.