September 2020, China sent positive signals regarding its 14th
Five-Year Plan for National Economic and Social Development (2021-2025), which
will be implemented starting in 2021. In particular, the issue of increasing
food reserves as a source of food security again at an accelerated pace may lead
to an increase in China’s demand for agricultural commodities, which will be an
important driver of higher global agricultural commodity prices.
anticipates that, in the short run (2021-2023), the additional demand for
agricultural commodities due to China’s policy will contribute to an
acceleration in agricultural commodity prices
for a short period.
Other policies issued by the Chinese authorities that may affect agricultural
commodity prices still need to be tracked. Afterwards, China’s additional
demand for agricultural commodities is expected to be sustained for another 5
years (2024-2028) to foster confidence towards its food reserves for a while
longer, which will contribute to keeping prices at a good level. However, from
2029 onwards, China is expected to shift to a self-sufficiency economy, leading
to a decline in its demand for imported agricultural commodities, which in the
long run could lead to lower agricultural commodity prices.
Thailand will be affected by changes in the prices
of agricultural commodities in the world market, if only the soft commodity
market that has a direct impact on Thailand is analyzed, because agricultural
products are important exports of Thailand and China is Thailand’s largest
export market for such products, accounting for 28.1% of Thailand’s total
agricultural export value. Although in the short term, Thailand will benefit
from rising prices, especially for the main exports to China such as rubber,
tapioca, rice and sugar, Thailand may lose out in the long term when prices are
in a downward cycle; therefore, all related parties need to be more aware of
the impact of China’s policies on Thai agricultural commodity prices and be
prepared by accelerating the development of agricultural production capability
to build up food security while preventing the effect of more fluctuations in
agricultural commodity prices.
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