The Ministry of Commerce has said it is closely watching the expected shift from El Niño to La Niña, which could significantly impact Thailand’s inflation rates, especially for water-sensitive items such as fresh vegetables and fruits.
Trade Policy and Strategy Office (TPSO) Director-General Poonpong Naiyanapakorn notes that El Niño conditions are forecasted to shift to La Niña between June and August, bringing increased rainfall that could disrupt agricultural activities and elevate prices. The climatic change, alongside external factors like the global rise in oil and fertilizer costs due to the Russia-Ukraine conflict, played a substantial role in inflating costs in 2022.
Poonpong added that heavy rainfall last year led to flooding that significantly reduced crop yields and availability, causing spikes in vegetable and fruit prices during the wettest months. These items, which account for 5.83% of Thailand’s inflation basket, saw price increases of up to 12.4% in 2022. A severe La Niña could exacerbate these conditions, leading to further crop damage and shortages, affecting even the prepared meals and food delivery sectors that depend on these raw materials.
The TPSO highlights the need for vigilance and adaptive management strategies to mitigate potential impacts on agriculture. The Commerce Ministry is also prepared to implement comprehensive support measures for affected farmers, businesses, and consumers, aiming to cushion the blow from these climatic disruptions and stabilize market conditions. (NNT)
