Opinion

Vegetable Prices in Thailand On an Upward Trend Since November 2021

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Unexpected rainfalls in the last few months of 2021 resulted in flash flooding across different regions of Thailand. The floods affected over 5.2 million hectares of plantations and impacted the growth of vegetables. The volume of the harvest was negatively impacted which resulted in a shortage across the domestic markets pushing up vegetable prices. The prices were further exacerbated by increasing prices of oil and raw materials of agricultural inputs. Furthermore, in December the prices went up even more due to the Christmas-New Year's holiday with the price of shallots 58.42% more than the previous month, the price of garlic up by 28.42%, and the price of chilies 110.56% more than the previous year.

Thailand witnessed intense rainfall during the second half of 2021 which resulted in numerous incidents of flash flooding. The floods resulted in overflowing river banks which had a negative impact on the vegetative cover of the nearby areas. About 5.2 million hectares of plantations and 463 thousand farmers across 48 provinces of Thailand were impacted by the floods. The volume and quality available for harvesting in the coming weeks were reduced significantly due to the collection of water in the fields. Vegetables like coriander, kale, eggplant, chili, onion, and garlic which are more sensitive to water, and weather conditions recorded a fall in production volumes and a fall in shelf life due to water damage.

In the first half of 2021, rainfall in Thailand remained below the average levels and it was not until September that the rainfall exceeded the anticipated levels. In September, the actual rainfall was 19% more than the average, and the difference grew to 27% in October and peaked at 29% in November. More than average rain has created unfavorable agro-climatic conditions for the vegetables to grow in the last few months. The excessive and unanticipated rainfall resulted in the overflowing of river banks and flash floods across the vegetative cover.


Source: VAM. Food Security Analysis.

The floods resulted in a shortage of vegetables in the domestic markets which increased the prices of some of the staples. The problem was further exacerbated by increasing prices of oil and raw materials of agricultural inputs. In December, the problem became even more intense due to increased demand during the Christmas-New Year's holiday season. As of 28th December 2021, the price of shallots was 58.42% in the month in comparison to the same period last month. The price of garlic was also up by 28.42% and the price of chilies skyrocketed by 110.56%.

Initially, it was expected that the price movements were short-term and the government's effort to control the prices would stabilize the market. The government’s attempt to keep the price of diesel fixed to control the transportation costs stable also failed as the prices continued to climb even at the end of the year. The demand is currently very high in the Thai market and it is expected to remain the same till the Chinese new year of 2022.

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