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https://www.nationthailand.com/thailand/economy/40023382

Rice Department will upgrade machinery to boost seed production

FRIDAY, DECEMBER 23, 2022

The Rice Department will invest more than 1.2 billion baht to increase the production of rice seeds so it can meet demand for 150.000 tonnes per year, its director-general, Natthakit Khongthip, said on Thursday.

The department has developed a plan to increase production of the seeds from the current 95,000 tonnes to 150,000 tonnes a year, Natthakit said.

The main hurdles to increased production are lack of funds and infrastructure, he said, explaining that rice research centres are inefficient because their machinery and tools are broken or are so old that they are no longer compatible with new technology.

The department will increase manufacturing capacity at 16 rice research centres nationwide, Natthakit said.

It will invest 1.256 billion baht for 31 machines to increase the production of breeding and foundation seeds, which will ensure it meets demand for seeds and also improve food security, Natthakit said.

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https://www.nationthailand.com/thailand/economy/40023368

January fuel tariff hike will raise product prices by 5-12%, warns JSCCIB

FRIDAY, DECEMBER 23, 2022

The fuel tariff (FT) increase in January will force manufacturers to raise product prices by 5-12%, industry chiefs warned on Thursday.

The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) voiced concern after the government announced subsidies to soften the FT hike’s impact on household utility bills but prepared no such measures for business.

The January-April increase in FT will drive up the cost of electricity to 5.69 baht per unit, the JSCCIB said.

Federation of Thai Industries (FTI) chairman Kriengkrai Thiennukul said the committee estimates that businesses with high power demands such as petrochemical, iron and cement manufacturers will need to hike their product prices by 9-12%, while medium power users like automotive, electronics, sugar, and rubber manufacturers will raise prices 6-8%. Low-power industries such as pharmaceuticals, printed materials and clothing will be able to keep their price hikes to 5% or less, he said.

The FT hike would leave Thailand with the highest electricity costs in the Asean region, Kriengkrai said.

“This could drive multinational corporations to shift their manufacturing bases to neighbours with cheaper power bills, such as Vietnam, which charges only 2.88 baht per unit.”

The committee urged the government to delay the FT hike until the second half of next year, citing the Energy Regulatory Commission’s forecast that Gulf of Thailand natural gas output will rise in the second half of 2023, bringing down the cost of electricity generation.

To make up for the delayed FT hike, the government could raise the loan limit for the Electricity Generating Authority of Thailand (Egat) and grant it a break on revenue contribution, the JSCCIB added.

“With these measures, we estimate that Egat can cover electricity-generation costa [without ft adjustment] for more than two years,” Kriengkrai said.

He also urged the government to decelerate investment in private-power-producer (PPP) projects. He said PPP projects were now far exceeding electricity demand, but the government still has to buy power from them as per the contracts.

The committee estimates the government has to pay PPPs 30.6 billion baht from September to December this year, and around 32.4 billion baht from January to April next year.

“This money could have been used to subsidise power bills for industrial users,” the FTI chief said.

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Govt plans more relief for low-income earners as power bills expected to rise

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https://www.nationthailand.com/thailand/economy/40023367

Baht weakens against dollar as expert warns of volatility from US inflation data

FRIDAY, DECEMBER 23, 2022

The baht opened at 34.85 to the US dollar on Friday, weakening from Thursday’s close of 34.69.

The currency will likely move between 34.70 and 35.00 against the greenback during the day, Krungthai market strategist Poon Panichpibool said.

Poon cautioned the baht could fluctuate in a wide range after it weakened against the strengthening dollar and gold purchases. The baht will continue to weaken if the currency market remains in a risk-off state and foreign outflows from the Thai stock market persist, he added.

However, the baht is unlikely to breach its resistance level of 35-35.20 easily because investors including exporters are waiting to sell the dollar when the baht weakens while foreign investors may short the currency in expectation of baht strengthening, Poon said.

He warned to beware of currency market volatility before and after the US personal consumption expenditures (PCE) report, the US Fed’s preferred measure of inflation, is released on Friday (US time). Higher-than-expected PCE figures will put pressure on the dollar. Poon said the baht may strengthen as a result, but he was sceptical it would exceed its support level of 34.5 to 35.6.

He also advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.

Related stories

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https://www.nationthailand.com/thailand/economy/40023360

Consumer spending expected to hit 17-year high during New Year period

THURSDAY, DECEMBER 22, 2022

Bolstered by the government’s stimulus measures, Thailand’s consumer spending is predicted to hit a 17-year high, reaching 103.04 billion baht, according to the University of the Thai Chamber of Commerce (UTCC).

The president of the UTCC and adviser to the Centre for Economic and Business Forecasting, Thanavath Phonvichai, revealed during the conference on “Consumer behaviour and spending during 2023 New Year festival” that the New Year period is expected to generate over 103.04 billion baht (US$2.9 billion) in consumer spending, leading to a 20.1% expansion of the economy.

“It would be the first time that consumer spending would be exceeding 100 billion baht since 2007,” Thanavath said, adding that it would benefit the economy in the post-Covid-19 era.

With the support of the government’s stimulus measures, such as “Shop Dee Mee Kuen” (Shop and Payback) and “Rao Tiew Duay Kan” (We Travel Together) schemes during the first quarter of next year, the country’s economy is expected to grow by 0.1–1%, said Thanavath.

The adviser to UTCC’s council, Saowanee Thairungroj, said that the survey regarding consumer spending behaviour during the New Year festival, conducted between December 9-16 with a sample size of 1,345 participants across the country, showed that 69.8% of respondents are likely to spend money on travelling and party through the New Year period.

The survey also illustrated that consumers tend to buy more luxurious goods, with a basket of healthy products the most popular New Year gift.

“The North of the country seems to be the most popular region for tourists, followed by the Northeast, especially from December 29 this year to January 2 next year,” she said.

She said 54.4% of participants said the current economic situation affects their spending during the New Year festival, while 80.4% said that Covid-19 has no effect on their spending. Plus, 55.6% said that they think about their debt when using money, she added.

“Some 48.3% of respondents thought that this New Year festival would be more bustling than the previous year,” she said.

Meanwhile, Kasikorn Research Centre (KResearch) expects spending by Bangkokians during the New Year festival to be around 30.9 billion baht (US$0.89 billion), up 10.5% year on year following recovery in economic activities and tourism in the post-Covid-19 era.

However, most people would set aside their budget only for the four-day-long New Year holidays (December 30, 2022, to January 2, 2023) due to uncertainty over rising product prices, KResearch said.