15/1/14

Thai Coffee Growers to Face Greater Competition in ASEAN

With the coming of the ASEAN Community, Thai coffee growers are likely to face greater competition. The Department of Agriculture has suggested that they increase productivity and seek ways to reduce production costs.
The Department has provided coffee growers with farming techniques to improve their production and supply chains, so that Thai coffee would become better known worldwide.
Demand for coffee in the global market has been increasing. It stood at eight million tons annually during the past three years. Statistics show that, in 2012, demand for coffee beans by processing plants in Thailand came to 67,620 tons, up from 61,480 tons recorded in 2011. The volume rose to about 70,000 tons in 2013.
There are two coffee varieties grown commercially for consumption: Robusta and Arabica. The best coffee is usually produced from Arabica beans, which are usually roasted and made into fresh coffee. In Thailand, the Robusta variety is widely grown as a cash crop in the South, especially in Chumphon and Ranong provinces. This variety is easy to grow in lowland areas, and it is mainly used for instant or blended coffee. 
The Arabica variety is grown on highlands in the North, especially in Chiang Mai, Chiang Rai, Mae Hong Son, and Phetchabun. The weather in these provinces is cool, in comparison with the rest of the country. 
According to the Department of Agriculture, the coffee planting area in Thailand covers 290,000 rai, or 116,000 acres, while production is 30,000 tons a year. Out of this production, 8,000 tons are Arabica beans. As domestic demand for coffee is on the rise, Thailand imports a great volume of coffee each year. Because of the higher quality of the Thai Arabica coffee, when compared with that of Laos and Myanmar, it is sold at higher prices. The Department pointed out that when the ASEAN Economic Community is in place in 2015, coffee at lower prices from neighboring countries is likely to compete with Thai coffee. This situation would affect Thai coffee growers, so they need to adjust themselves by improving productivity and reducing production costs at the same time.
According to the International Coffee Organization, statistics on coffee production in ASEAN countries in the 2011/2012 production year show that Viet Nam came first in terms of Robusta output, accounting for 37.8 percent of the global production. Indonesia came second, with 13 percent, followed by Thailand at 1.7 percent, Laos at 1.2 percent, and the Philippines at 0.7 percent. As for the Arabica variety, Indonesia came first, accounting for 2.2 percent of the global production, followed by Viet Nam at 1.2 percent.
Looking at per capita consumption in 2011, Laos registered at 1.4 percent, followed by the Philippines at 1.38 percent, Vietnam at 1.07 percent, Indonesia at 0.86 percent, and Thailand at 0.44 percent.

(thailand.prd.go.th)