The Impact of the COVID-19 Pandemic on Thailand’s Agricultural Export Flows

The country's agricultural and food product exports remain vital to its economy, with approximately 40 percent of its agri-food products being exported to major trading partners such as China, Japan, and the United States of America. Agri-food exports to intra-Association of Southeast Asian Nation (ASEAN) countries have also grown rapidly, while agricultural exports to other developed countries have been relatively stagnant in recent years. The composition of Thailand's top ten agri-food exports has barely changed in the past two decades, with most of the top ten agri-food products exported in the period of 1998-2008 also being among the top ten products between 2009-2018. Natural rubber and rice continue to play a dominant role, accounting for one-third of total agri-food exports in value. However, the COVID-19 pandemic has caused a disruption of the supply chain in the rubber industry, leading to a decline in world demand for natural rubber and a subsequent fall in the value and volume of natural rubber exports from Thailand. The pandemic has also had a significant impact on Thailand's rice exports, with a strong Baht and high production costs weakening the country's competitiveness in the world market. A drought in 2020 lowered sugar yields, causing production to fall significantly, while COVID-19 reduced demand due to lockdown measures. The decline in sugar exports was exacerbated by the combination of supply and demand shocks. On the other hand, the pandemic caused a surge in demand for canned tuna, providing increased export opportunities for Thailand, but this surge was short-lived. Thailand is also an important exporter of processed chicken, but exports were negatively affected by COVID-19 due to the disruption of transport and logistic systems, resulting in higher costs for trade. The contraction of crustaceans' exports can be attributed to both the lockdown and strong competition in world markets. However, processed crustacean exports performed better than exports of fresh and frozen crustacean due to consumer preferences. The pandemic has also had an impact on Thailand's processed fruit and vegetables exports, with export values increasing in 2020 but export volume dropping with all major trading partners. People bought large quantities of shelf-stable products such as rice and canned fish but reduced the purchase of processed fruit and vegetables. In conclusion, the impacts of COVID-19 on most important Thai agri-food export flows seem to be temporary, but there is a possibility of increases in COVID-19-related non-tariff barriers (NTB) that originated due to food safety concerns and production standards. Small and medium exporters are likely to be most affected due to limited resources, and food safety concerns and production standards also affect upstream suppliers, small farmers, and fishers. Such NTBs can have longer-term impacts on the prospects of post-COVID Thailand agri-food exports. The changing world demand for agri-food products and potential new TBs could possibly have a profound impact on Thai agri-food export flows in the future. Exporters, governments, and international organizations need to work together to keep a balance between public health concerns and business operation efficiency. Promoting trade facilitation while ensuring food safety measures to safeguard public health would help Thailand gain more from exports.