Factors such as Farm mechanization, increased domestic production will be inducing the market to grow at a robust rate 2020-2025 period, says a report by Ken Research.
1. ‘Agricultural Mechanization in Thailand:” Mechanization of Agricultural Procedure in Thailand is a necessity more than want.
Agricultural Machinery Trends in Thailand
Modern agricultural technologies (high yield variety seed, fertilizer, pesticide, mechanization, and other inputs) had been introduced in Thailand since 1976 or the fourth National Economic and Social Development Plan. During the same period, the expansion of other economic sectors of the country (including industrial, construction, tourism, and services) has surged to a huge extent. These draw out a magnitude of labor force from the agricultural sector, and have caused an on-farm labor shortage crisis. One of effective methods to cope with labor shortage while improving farm labor productivity is through mechanization. Mechanization in the country differs from region by region, depending on farm income. The Central Plain region is the richest and most progressive farming area in the country. Here has mechanization progressed from power-intensive operations, such as land preparation, water pumping, and threshing, to control-intensive operations, such as harvesting, seeding, and weeding. More sophisticated machines, such as combine harvesters, seed drills, and sprayers, are often seen in the Central Plain.
2. “Imports prioritized in recent past:” Lack of domestic manufacturing led to an increase in import value.
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The agricultural machinery industry in Thailand consists of only a few large companies, all of which are foreign-owned. Local manufactures are small in size, therefore not being able to produce machines with high quality. They tend to dominate the low-end machinery and parts segmentation of the market. The limited domestic supply of high-end machinery and parts has forced downstream Thai industries to rely on imports. Over the past five years, agricultural machinery imports have grown to reach an average level of almost US$500 Mn per year, with the top categories being four-wheel tractors (55% of the total import value) and equipment for harvesting and threshing (14%). Most of imported machines are from Japan, China (under Eurotract brand), USA, and Europe.
3. ‘‘Steady but long-term growth prospect:” Factors such as increase in domestic production & farm mechanization will induce a steady & long term growth.
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The market for agricultural machinery in Thailand remains small, leaving plenty of room for opportunity. The ratio of agricultural machinery use in the country is 30% compared with more than 90% in developed countries such as Japan, South Korea, USA and Europe. Factors such as labor shortage, increasing demand for food, both for domestic consumption and export are likely to boost market growth in the near future as a result of which the market is anticipated to grow at a CAGR of 4% during the forecasted period, crossing the $ 2 Bn benchmark.
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Thailand Agricultural Machinery market
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