Thailand Agricultural Machinery Market Report – 2020 : Ken Research

• How The Macroeconomic Factors Of Thailand Has Performed In The Past?The economy of Thailand has been considered to be volatile due to its political

instability and natural calamities. However, relative stability and favorable order in economic variables such as the inflation rate, exchange rate and unemployment rate have helped the Gross Domestic Product (GDP) of the country rise from USD ~ billion in 2010 to USD to USD ~ billion in 2015. The 2025 projection for GDP of Thailand is estimated to be USD ~ billion, while the GDP (PPP) of the country is expected to reach USD ~ billion. In 2015, the percentage of rural population declined to ~%, amounting to ~ million persons. On the other hand, the percentage of urban population increased to ~% of the total population, accounting to ~ million individuals. The higher wage rate and infrastructure facilities attracted individuals from rural to urban areas.

As is true in every newly industrializing economy, the economy of Thailand is mixed. While Thailand is widely perceived as an economically developing country led by agricultural exports, the majority of the country’s income is driven by the manufacturing and service sector. In 2010, the agriculture sector contributed ~% to overall GDP while the manufacturing and service sector contributed ~% and ~% respectively, to the overall GDP of the country. In 2015, the contribution of the agriculture sector declined to ~% of GDP, while the manufacturing and service sector contributed ~% and ~% respectively, to the overall GDP. The future estimates indicate the contribution of the agriculture sector to further decline in 2016 to ~% and by 2020; the sector is estimated to contribute ~% to overall GDP. The GDP Per Capita (Nominal) increased from USD ~ in 2010 to USD ~ in 2013 and then decreased to USD ~ in 2015.

• How The Changes In Cropping Pattern Has Influenced The Sales For Agricultural Equipment In Thailand

Agriculture land is typically the land devoted to rearing of livestock and the production of crops. Arable land is the land that is capable of being ploughed and used to grow crops. The total agriculture land in Thailand increased from 210.6 thousand square kilometers in 2010 to 227.3 thousand square kilometers in 2015. Alternatively, the arable land in Thailand increased from ~ thousand square kilometers in 2010 to ~ thousand square kilometers in 2015.Thailand‘s law defines land as either private or public. Private land is owned by individuals, groups, or entities. The balance is public land, which includes, land used by the state, land open to the public, land identified for allocation under land reform plans and forestland.The total number of farm holdings in Thailand totaled to ~ million with an area of ~ million hectares in 2015. The area in Thailand under irrigation covers ~% of the overall agricultural land, amounting to ~ million hectares.

The Influence of weather and climate, farmer decision making and technology, prevalence of severe drought, the falling price of rice and the adverse impact of global warming have resulted in changing cropping patterns in Thailand. The harvested area of rice in Thailand decreased from ~ million hectares in 2010 to ~ million hectares in 2015. The oversupply of rice with the government of Thailand due to the rice pledging scheme had caused the price of rice in the international marker to fall. The harvested area for Cassava increased from ~ million hectares in 2010 to ~ million hectares in 2015. The unstable price of rubber in the international market has caused farmers to switch to more lucrative cash crops. The harvested area for rubber has decreased from ~ million hectares in 2010 to ~ million hectares in 2015. Since the government directly negotiates with the farmers on the price of sugarcane, the harvested area increased from ~ million hectares in 2010 to ~ million hectares in 2015. Mechanization has played a significant role in increasing agricultural production by completing farm operations in time, reducing cost of production and increasing crop intensity.

• What Have Been The Outlook Of Government Towards Agricultural Equipment Market In Thailand

The government of Thailand has no declared policy on farm mechanization. The development of agriculture with respect to machinery in other countries had caused the government to show an increase in interest. Support to SMEs was reinforced through a promotional tax exemption package to upgrade their machinery. Government procurement remained an important instrument of economic policy, with a price preference margin of ~% given to domestic suppliers. The tariff remains one of Thailand's main trade policy instruments and a relatively significant but declining source of tax revenue. As a result of tariff line changes relating to the introduction of the Harmonized Commodity Description and Coding System 2012, tariff nomenclature and higher ad valorem equivalent rates; the average applied MFN tariff rate rose from ~% in 2011 to ~% in 2014. Non-agricultural products continue to face considerably lower tariff rates (~ %) than agriculture items (~ %). Thailand has signed Free Trade Agreements (FTA’s) with many countries which have resulted in the removal of tariff and quotas on various imports. Those countries which have not signed Free Trade Agreements (FTA’s) with Thailand have to follow the tariff lines for products imported to the country.

Agricultural machinery standards from various countries have been studied and then adapted to be suitable with Thai agricultural machines and their corresponding working conditions. Safety standard is one part of each agricultural machinery standard. Most agricultural machinery standards are. Voluntary standards Only small diesel engine standard is a mandatory one and only a few agricultural machinery manufacturers apply for the TISI standard certification. In Thailand, standards of some agricultural machinery are already defined but the number of agricultural machinery manufactures that requested for the certificate for their products were small. However, only few numbers of requested cases were awarded the certificates. Vehicle emission standards in Thailand are also developed by the Thai Industrial Standards Institute. Thai emission regulations are based on European emission standards and test procedures. Emission standards for diesel engines in Thailand are based on EU regulations: currently Euro III. The government of Thailand has provided subsidies to farmers in the form of efficient agricultural policies such as the agriculture crop zoning program, agriculture extension (Large Lands) program and the price intervention policies

• How The Agricultural Equipment Market Has Performed In Thailand?The revenues from the overall agriculture equipments market increased from USD ~

million in 2010 to USD ~ million in 2015, accounting for a CAGR of ~% during the same period. Total agriculture productivity of the country had diminished and the contribution by the agriculture sector to GDP reached USD 36.2 million in 2015 from 47.5 million in 2013. The contribution by the tractor market to the overall market stood at ~% in 2015. Harvesters and Rice Transplanters contributed ~% and ~% respectively, to the overall revenues of the agriculture equipment market.

• How The Agricultural Tractor Market Has Resembled Growth In The Past?Military government focused on regulatory policies that complimented the services

and industrial sector and neglected the agriculture sector. The revenue from the tractor market in Thailand increased from USD ~ million in 2010 to USD ~ million in 2015, achieving a CAGR of ~% during the same period. Rice farmers expected to substitute around ~ hectares of rice lands with sugarcane in 2015. Tractors have been segmented on the basis of power and those that range from 14.5 to 47 hp were most preferred in Thailand, accounting for ~% of total tractor sales volume. Tractors below 14.5 hp, also known as power tillers, contributed ~% to overall tractor sales.

• How The Rice Transplanter Market Has Performed In Thailand?The market revenue for Rice Transplanters increased from USD ~ million in 2010 to

USD ~ million in 2015, accounting for a CAGR of ~% from 2010-2015. The harvested area of rice in Thailand increased from ~ million hectares in 2010 to ~ million hectares in 2012. The market for rice transplanters has been segmented on the basis of power. Rice transplanters below 10 hp include 4 row and 6 row walking type and contributed around ~ to overall sales. Transplanters above 10hp include 6 row and 8 row riding type, contributed ~% to overall sales. The need for increasing productivity and output of rice resulted in higher demand for transplanters above 10 Hp.

• How The Combine Harvestor Market Has Developed In Thailand?The market revenue from combine harvesters increased from USD ~ million in 2010 to

USD ~ million in 2015, accounting for a CAGR of 11% during the same period. The government introduced the rice pledging scheme that gave farmers an assured above market price for rice produce The market for combine harvesters has been segmented on the basis of power. Combine harvesters of 70 hp and below are most preferred by the farmers of Thailand and hence this segment accounted for 65% of total sales of combine harvesters. Harvesters of 70-105 hp and above 105 hp contributed ~% and ~% respectively to the overall sales of combine harvesters in Thailand.

• What Were The Driving Forces For Tractor Implements Market In Thailand?The revenues from the tractor implement market augmented from USD ~ million in

2010 to USD ~ million in 2015, accounting for a CAGR of ~% during the same period. It has been estimated that almost ~% of implements bought are along with tractors. Therefore, the growth of the implements market is highly dependent on the sale of tractors in Thailand. In addition to this, a higher replacement demand for implements has caused a small portion of the population to procure them independently. The market for tractor implements has been segmented on the basis of major products. Rotavators contributed around ~% to overall sales of tractor implements. Disc ploughs and harrows contributed ~% and ~% respectively, to overall tractor implements sales. The shift towards organic farming and reduction in the use of large amounts of fertilizers have caused farmers to use manual methods for crop fertilization, which has led to the decline in sales volume of fertilizer spreaders

• How The Major Players Have Dominated Agricultural Equipment Market In Thailand?

Changes in labour force, improving credit environment, government support for agricultural mechanization and a strong replacement demand are expected to drive the growth of agricultural equipments in Thailand. With respect to sales of agricultural tractors, Japanese manufacturer Siam Kubota had the highest market share of ~%, followed by Yanmar S.P. with ~% and Iseki with ~% in 2015. The agricultural equipments used in Thailand are locally produced. However, local machines produced from small manufacturer, are not standardized in quality, efficiency and durability. Currently, there are two forms of utilizing agricultural machinery: as machine owner and machines hiring service. Given the target audience, it is essential manufacturers use efficient channel strategies to create awareness and boost the sale of agricultural machinery. It has been estimated that nearly ~% sales of new tractors is accompanied with the purchase of tractor implements.

In the combine harvester market, Siam Kubota had a share of ~% of overall sales, Yanmar S.P. accounted for ~% of total combine harvester sales, while domestic manufacturers TAMCO and Kaset Phattana and Sakpattana contributed ~%, ~% and ~% respectively; to overall sales of combine harvesters. With respect to Rice Transplanters, Siam Kubota had the share in overall sales accounting to ~%. On the other hand, Yanmar S.P. accounted for ~% share in overall sales of rice transplanters. Siam Kubota manufactures 4 and 6 row walking and riding transplanters and 8 row riding transplanters; catering to farmers with different farm sizes. The 4 and 6 row have transplanting speeds of up to ~ meters per second and a fuel consumption of ~ to ~ litre a rai, replacing around ~ to ~ farmers The sale of agricultural equipments is expected to reach ~ in 2018 and ~ by 2020. It has been estimated that revenues from the agricultural equipment market will increase from USD ~ million in 2018 to USD ~ million by 2020.

The growth in sales of tractors and combine harvesters is expected to drive the revenue and sales of the overall agriculture equipment market. The increased penetration in the northeastern region by manufacturers and dealers will help shape the positive growth in sales and revenues of the tractor market. Combine harvesters of 70 hp are demanded by most farmers and this segment is expected to aid the growth of the overall combine harvester market. The growth in sale and revenue of tractor implements is dependent on the sale of agricultural tractors as 70%-75% of tractor implements are bought along with tractors. Region and land holding size are the primary factors that determine the type of agricultural machines a farmer would like to purchase. The annual income a farmer generates would depend majorly on the crops grown, farm size and the machinery utilized. Thus, the annual income earned by a farmer in Thailand can range from USD ~ to USD ~.

Apart from this, certain secondary factors such as the type of crop, fuel efficiency of the desired equipment, cost of implements, brand and the credit availability will determine the quantity and types of machinery that would be demanded by the farmer. Usage pattern of farm equipments play an essential role in understanding the intensity of farming that occurs in a year. It has been estimated that tractors are used for ~ to ~ hours a year. Combine harvesters are used only during the harvest season due to which their average usage a year amounts to ~ to ~ hours. Rice can be planted and harvested a maximum of two times a year due to which the usage pattern for Rice Transplanters ranges from ~to~ hours a year.

• Source: https://www.kenresearch.com/agriculture-and-animal-care/agriculture-equipment/thailand-farm-equipment-implements-market/25252-104.html

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