GET A FREE BUSINESS IN THAILAND PROPOSAL

The phone number is not valid

Thank you for filling up the form and our team would get back to you with a possible solution soon.

Commodities Industry

Thailand is awash with resources including metals, agricultural produce and etc. Thailand also seeing robust growth over the years thanks to its pro-investment policies, well-developed infrastructure, strong export industries and a free-enterprise economy. It is among the leading producers of coffee, sugar, lignite, tin, feldspar, gypsum, and cement globally. Other mineral resources include coal, petroleum and natural gas. Thailand also has abundant reserves of gold, zinc, iron and copper.

Rice production signifies an important portion of Thailand’s economy and its labor force. 40% of its workforce is engaged in agriculture, around 16 Mils. of them work as farmers in rice fields.

The country has a very strong history of rice production. Thailand has the fifth-largest amount of land used for cultivation of rice in the world and is the second largest rice exporter in the world. The country has plans for further increasing the availability of its land for rice production, with the goal of enhancing 500,000 hectares to its existing 9.2 million hectares.

In 2017, the country exported 11.25 Million Tons. of rice, up 14.8 % YoY. Sales revenue rose 15% to THB 168 Billion. Out of the total annual exports, 70% is the commodity-grade and 30% is hom mali. Few special grades like riceberry contribute to a very minute amount. Thailand is expected to export 9.5 Mils. Tpns. in 2018.

The cabinet has approved 3 programs which aim at increasing the rice production output, with a budget of over THB 25 Bils. Nattaporn Jatusripitak, Thailand’s Vice Minister for Commerce, revealed that these three programs would be operative from 2017 to 2021.

In the first program, the rice department would supply high-quality jasmine rice at THB 10 per kg to each participating farmer who qualify for up to 8,000 square meters. The second program supports production and joint management efforts for reducing costs by accompanying the use of specific strands, land cultivation, organic fertilizer and agricultural machinery. The third program supports organic rice production by sponsoring qualifying farmers with up to 24,000 square meters, at THB 9,000 per rai. The funds would be dispersed over the course of 3 years for monitoring the quality of organic crops.

Other initiatives include the production of THB 2 Bils. rice insurance program and educating low-income farmers in finance. In a bid for lifting the economy of the country, the ruling junta has announced stimulus measures and ramped up the investments in infrastructure as well.

Thailand is one of the leading producers of coffee in the world. The country ranks third in the list of coffee producing countries in Asia with Robusta being the predominant one accounting almost 99% of its production.

Back in the year 2002, Thailand produced merely 500 tons of Arabica. As of today, Thailand produces at par with Panama. In the year 2013, the Good Quality Coffee group was instituted – today SCATH (the Specialty Coffee Association of Thailand) and started their green beans awards system. Today, Thailand has specialty coffee shops and roasters spread across the country.

There’s still more room for a Thai specialty coffee prospect to grow in the near future, but the present-day trend is exceptionally promising. The country has a lively local specialty coffee prospect with the rising number of consumers.

As the consumer base of Thai specialty coffee scene flourishes, the production side is also anticipated to grow. More emphases are provided for improving farming methods and cherry quality. Today, you will hear people talking about the country’s higher rapidly improved quality of the coffee.

After growing nearly to 50 percent in the sugar cane production between the year 2007 – 2015, the sugar industry in the country is aiming for another remarkable growth period under the 10 year Cane and Sugar Strategy.

The sugarcane production in the country was at 63.8m tonnes in the year 2007 which grew to 106m tonnes in the year 2015. Come 2026, Thailand’s Ministry of Industry has set the target to produce 180m tonnes of cane, an impressive 70 percent rise in 10 years. The plan is for expanding the present 1.6m hectares of sugar cane planting area to 2.56m hectares, by transforming present rice fields to cane plantations, together with increasing the sugar yields by employing better sugarcane varieties.

For complementing this growth, the government of Thailand has approved the building 12 new sugar factories and issuing licenses to some of the existing mills for upgrading their present capacity. In case all of the licenses were utilized and developed, it will increase the capacity of annual cane crushing production to 1.1m TCD (tonnes of cane per day) from the present 883,000 TCD.

Around one-third of the total global rubber, consumption is produced in the plantations in Thailand, Malaysia and Indonesia, and parts of Central America and West Africa. Thailand, Malaysia, and Indonesia are the top producers of natural rubber in the world. The country is the world’s leading producer and exporter of the natural rubber. Thailand produces around 3 million tons annually, 40 percent of global production.

The country’s leading position is because of its ample resources of natural rubber, accessibility, a cost-effective workforce and a tactical location in the APAC region. Investors are also drawn by several other factors like the robust power grid, ample water supply, and a dependable transport infrastructure. The country’s proximity to APAC’s large market makes it perfect for the just-in-time delivery necessary to the production of complex rubber products.

In the country, the rubber plantations occupy about 3 mils. hectares of land, typically in the southern region where monsoon climate allows high yields. The government of Thailand plans for boosting the number of rubber plantations in the eastern, central and northern regions that would raise the natural rubber production.

Apart from being the top processor and exporter of high-quality rubber, the country is also the leading R&D (Research & Development) Center for rubber. The purpose of the R&D center is to develop complex technologies and create added value to the rubber products for enhancing the competitiveness of Thai industry and generate business opportunities.

Once a major producer of tin, Thailand now produces mainly gold, iron, silver, limestone, zinc, basalt and gypsum. The country produces more than 40 types of minerals. The most-produced minerals in 2016 were industrial rocks and industrial minerals, gold ore, and silver ore. There are mining and exploration activity in all of its regions. For instance, gold is produced in northern and central regions, limestone is produced almost across all the regions of the country and zinc in the western regions.

Generally, Atchayabat or an exploration contract, and Prathanabat or a mining concession could be permitted only to companies or people having a residence or domicile in the kingdom. A foreign registered corporation can request for a Special Atchayabat to prospect, and a Prathanabat to mine only for the gold ores within an area stipulated by the Ministry of Industry.

According to the Foreign Business Act B.E. 2542, running a mining business, comprising rock quarrying and aggregate crushing plant, is usually not permitted for foreign investment. However, a foreigner can operate a mining business only if a Thai person or a person of Thai jurisdiction holds at least 40% of the share capital in the enterprise of such partner of a foreign jurisdiction. Unless there’s a reasonable cause, the Minister of Commerce, along with Cabinet’s approval, might reduce the amount of requirement, however, it mustn’t be less than 25 percent and the number of Thai directors shouldn’t be less than two-fifths of a total number of the directors.

The Thai government policy is not to allow mineral rights to the foreign nationals. Though, it is possible to grant the mineral rights to the foreign companies under a special agreement. Majority foreign-owned companies willing to operate mining operations should obtain a license which is granted by the Minister of Commerce together with Thai cabinet’s approval as required under Foreign Business Operation Act.

The Land Code recommends a cap on the foreign ownership of 49%; there’s no restraint on foreigners leasing land. If the land to be used for mining business is a forest land, the company should have more than two-thirds of partners or shareholders being Thai nationals with more than 50% of total shares.

hailand is the leading exporter and supplier of several fresh fruits, particularly tropical fruits, in Asia due to its climate and geography.  The country produces tropical fruits like durian, mangoes, guavas, bananas, mangosteens, rambutans, oranges, lychee and coconuts. Thailand exports tropical fruits particularly to China and nearby Asian ones, it imports cooler climate fresh fruits from countries such as the United States, China, Australia, New Zealand, South Korea, Chile, Japan and South Africa.

In the year 2015, country’s fresh fruit imports increased by 10% to $683 Mils. from $623 Mils.  The US continued to be the third largest suppliers of the country’s fresh fruit imports after New Zealand and China. The top U.S. fresh fruits in demand in Thailand include grapes, apples, strawberries, cherries, citrus, stone fruits, and oranges.

Thailand – Fresh Fruit – Total Market Size
2015 2016 2017 2018 (Estimated)
Total Market Size 2,845,239 2,769,920 2,820,000 2,950,000
Local Production 3,175,000 3,200,000 3,300,000 3,500,000
Exports 953,223 1,113,432 1,200,000 1,300,000
Imports 623,462 683,352 720,000 750,000
Imports from the U.S. 37,690 33,166 34,000 36,000
Exchange Rate: 1 USD 34.25 35.30 34.80 35.00

$US thousands (total market size = (total local production + imports)-exports)

Because of marginal domestic production, the country relies on imports for meeting the country’s demand for soybeans.  The imported soybeans are mainly used for extraction of soybean oil.  These are also used for feed rations and food processing.  Food grade soybeans have very high potential in the Thai market.  The country currently imports around 80,000-90,000 MT (metric tons) of food grade soybeans. The United States and Canada are the two key suppliers I in this segment.  It is also important to note that Thai regulations necessitate that the imports of all soybean for food use are biotech-free.

Thailand – Soybeans – Total Market Size
2015 2016 2017 2018 (Estimated)
Total Market Size 1,140,615 1,246,945 1,100,000 1,163,500
Local Production 28,900 28,500 28,000 27,500
Exports 5,053 3,219 3,000 4,000
Imports 1,116,768 1,221,664 1,075,000 1,140,000
Imports from the U.S. 267,906 373,194 280,000 290,000
Exchange Rate: 1 USD 34.25 35.30 34.80 35.00

$US thousands  (total market size = (total local production + imports)-exports)

The tapioca industry of the country plays a significant role in the agricultural economy of the country. Tapioca apart from being used as a food, its native starch is used as a stabilizer and thickening agent in several products. Native starch is obtained from the roots of tapioca plant, that has the ability to grow in low-nutrient soils and dry weather where other crops don’t grow well.

The two types of tapioca that are grown in Thailand include:

  1. Sweet Tapioca: Sweet Tapioca has lower levels of cyanic acid. The taste isn’t bitter and could be consumed both by the humans as well as animals.
  2. Bitter Tapioca: This form of Tapioca is poisonous, as it has higher levels of cyanic acid. It isn’t suitable for direct consumption. It needs to be processed into pellets, flour, alcohol, or another derivative.

Nigeria is the largest producer of tapioca in the world, however, Thailand is the largest exporter of tapioca products globally. The country accounts for around 60% of global exports with the export value of around THB 40,000 Mils. annually. The major market includes Japan, China, Indonesia and Taiwan. There is also high demand for Tapioca starch from Thailand by countries in South America and Central America.

Formerly, milk wasn’t a significant product in Thailand, and later until the 2nd half of the 20thcentury. However, during the last 15 years, Thailand milk animals increased more than 1.5 times.

The graph above shows the Milk production and quantity of milk animals in the country. Recently, one could see a plateau trend. Possibly, dairy production in the country has grown in productivity.

The dairy sector of the country exports milk products to Laos, Myanmar, Cambodia and other several neighboring countries. The total of the value of the dairy products export in the year 2015 was about US$192 Mils.

For providing a long-term market for the Thai dairy farmers, the DPO introduced the school milk feeding program amongst the children under 12 years old. This program brings milk to the diet of the children and cultivates a lifetime milk-consumption habit in them. Currently, 40 percent of the quantity of liquid milk is produced in the country for this program.

These initiatives stimulate the functional and health benefits, directing towards all types of consumers for changing the awareness of Thais with respect to milk.

Milk and cream, containing added sugar, concentrated or other sweetening matter that is used in snack items and condensed milk, is produced by small cooperatives but the country continues to import balance of the demand. Thailand still imports roughly 50,000 tons of the powder milk yearly.

Please Enter your Details to Download a PDF copy of this Industry Report