The impact of devaluation on the rice industry in Thailand | |
| Author | Aimon Lertassavarat |
| Call Number | AIT RSPR no. SM-98-47 |
| Subject(s) | Rice trade--Thailand Devaluation of currency--Thailand |
| Note | A research study submitted in partial fulfillment of the requirements for the degree of Master of Business Administration, School of Management |
| Publisher | Asian Institute of Technology |
| Abstract | Devaluation of Thai baht has severely impacted the country's overall economic structure especially in terms foreign exchange rate, cost of production and revenue generation, when Bank of Thailand has changed exchange rate system from a basket peg to managed floating system on July 2, 1997. Most of the Thai industries faced disadvantage from this arrangements, while some industries get advantage based on cost structure and proportion export sales. Thai rice industry has also been affected in various dimensions due to the Thai baht devaluation. The objective of the study is to identify and estimate the cost structure in the rice industry m Thailand, considering both the local and import contents, and to assess the impact of devaluation on overall cost structure and export corresponding to the exchange rate variations. The study is focused on mainly on the analysis of production cost , price and quantity of rice export before and after devaluation, especially for the high quality rice. It was found that the cost structure of rice production before devaluation 87% on local and 13% with import content. However, after devaluation cost structure changed to 85% on local and 15% with import content. The paddy price was found as the most important cost factor in the production of rice for export, accounting for 81 % of total cost which has gone up by 14% after devaluation. Meanwhile considering cost in detail, labor cost is 57% of total production cost and as a major factor cost of rice production. Similarly, margin of rice export has increased from 47% to 53% for 100% rice and 21 % to 28% for 5% rice. The results also show that even though rice exports have increased in baht terms, however, have declined in dollar terms. Finally, recommendations are made paying specific attention to the Thai high quality rice industry to make it more export competitive, investment on R&D to reduce the cost of rice production as well as formulation of better marketing strategy and provision for government protection for competitive farming. |
| Year | 1998 |
| Type | Research Study Project Report (RSPR) |
| School | School of Management (SOM) |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Tang, John C.S. |
| Examination Committee(s) | Bechter, Clemens ;Johri, Lalit M. |
| Scholarship Donor(s) | Partial Scholarship from Asian Institute of Technology |
| Degree | Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 1998 |