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The appreciation of the baht is having a ripple effect on the agricultural sector with farmers being forced to sell their products at low prices, Board of Trade deputy secretary-general Pornsilp Patcharintanakul said yesterday.

Mr Pornsilp said farmers have to sell their products at bargain prices to exporters, who in turn have to sell their agricultural exports for less than their true value so their businesses can survive the financial crunch.

Local agricultural exporters do not have power over the agricultural market which is dominated by foreign importers, he said, adding that they are wielding influence in setting the price of farm products.

Agricultural exporters have to sell their goods at bargain prices to stay competitive with foreign rivals and to retain their share of the market, although they have to face the burden of increasing production costs, Mr Pornsilp said.

In order for them to avoid losses, exporters force farmers to sell their agricultural produce at low prices, too.

Mr Pornsilp expected the baht appreciation to have a gradual effect on the whole agricultural sector by the end of the year. He said shrimp farmers who cannot cope with increasing costs of production may have to lower their production capacity.

Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said the strong baht's impact on the income of grassroots farmers is not quite obvious for the time being, but he warned that its effects would begin to be felt in the next two months.
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By: Phusadee Arunmas & Anucha Charoenpo - Bangkok Post