La Niña weather phenomenon likely to further fuel food inflation
The Commerce Ministry is closely observing the transition from the El Niño to La Niña weather phenomenon, which could impact Thailand’s inflation, especially concerning food items like fresh vegetables and fruit due to their water sensitivity.
Director-General of the Trade Policy and Strategy Office (TPSO), Poonpong Naiyanapakorn stated that data from the Thai Meteorological Department (TMD) shows that El Niño conditions are weakening and are likely to transition to neutral conditions between April and June.
There is a 60% chance of shifting to La Niña from June to August. Many nations are likely to also find themselves victim to this weather phenomenon.
La Niña, characterised by stronger winds blowing from the eastern to the western Pacific Ocean, brings warm water to Southeast Asia, potentially leading to higher sea levels and heavier rainfall in the region.
These conditions could significantly affect agricultural products, particularly fresh vegetables and fruit, which are highly sensitive to water conditions.
Excessive rainfall can disrupt planting, hinder harvesting, and damage crops, leading to supply shortages and higher prices. Fresh vegetables and fruit make up 5.83% of Thailand’s inflation basket.
Conflict driven inflation
In 2022, Thailand’s inflation was influenced by multiple factors including the Russia-Ukraine conflict, which raised global oil and chemical fertiliser prices, and La Niña, which affected agricultural prices.
The average accumulated rainfall that year was 2,012 millimetres, 24% above the 30-year average from 1991-2020. The severe floods stemming from the increased rainfall had fuelled inflation as it reduced the amount of produce reaching the market.
Comparing the overall inflation rate to rainfall in the wettest months of August, September, and October, prices for non-alcoholic food and beverages, particularly vegetables and fruit, increased year-on-year by 11.8%, 12.4%, and 7.99% respectively in 2022.
Poonpong highlighted that unpredictable weather conditions and the risk of La Niña are natural cycles that cannot be avoided and may affect inflation rates in related product categories. Its severity will determine the extent of the impact.
“The Commerce Ministry pledges to prepare assistance measures, considering the impact on farmers, businesses, and consumers comprehensively. Effective planning is expected to help mitigate potential impacts”
A mild La Niña might result in appropriate water levels, potentially benefiting the agricultural sector by increasing supply. Conversely, a severe La Niña could cause flooding, crop damage, and raw material shortages in related industries.
Beyond fresh produce, the impact could extend to other products that use these items as ingredients, such as prepared meals and delivery food.
Relevant agencies need to monitor and evaluate the situation, plan water management and harvest times, develop agricultural areas and promote agricultural product management in line with market demand, reported Bangkok Post.
