Equity Analysis /
Thailand

Thailand: Food and Commerce - Key takeaways from BLS Food & Grocery Retail Day

  • Sustained high livestock prices through at least mid-2023

  • Grocers continued to mitigate rising cost via price hikes in 3Q22

  • QSR in Thailand rebounded nicely in 3Q22 to combat rising costs

Contributors
Chalinee Congmuang
Kalvalee Thongsomaung
Bualuang Securities
10 October 2022

Our full-house event focused on the hot issue of food price inflation. We started with regulators’ views, then moved on to the challenges facing upstream producers and downstream players. The firms’ mitigation plans look promising and should alleviate the impact.

Sustained high livestock prices through at least mid-2023

Livestock operators (CPF, GFPT and TFG) and the Swine Raisers Association of Thailand who attended our Food & Grocery Retail Day concurred that the Thai pork up-cycle is likely to last through mid-2023 under the base-case scenario or extend to the end of 2023 and into 2024 under the best-case scenario while the Thai chicken up-cycle will last through mid-2023, at least, in tandem with the Thai pork up-cycle. The raw material (domestic corn and soybean meal) prices have passed their peaks in 1H22. Their price retreat will be only modest in 2H22 and their prices are expected to fall further in 2023. Thus, the sustained high livestock prices with the modest drop in raw material costs will push up livestock margins in 2H22 through 1H23.