The trend will come as a relief for the Thai food industry, which had been struggling to meet production costs amidst unfavourable global and domestic conditions, according to a report by the US Department of Agriculture (USDA).
Quoting information supplied by the Bank of Thailand, the USDA revealed that rising costs for raw produce like rice, milk and soybeans and sustained flooding in the country had forced processors to hike up retail prices for their goods.
The USDA estimates that sustained flooding in the country through the second half of 2006 negatively affected 480,000 hectares of agricultural land, heightening pressure on the country fruit, vegetable, and grain supplies.
As a result, processors within the country were paying almost 11.3 per cent more for raw materials in January 2007, than during the same period the previous year.
Though supplies remain tight -- particularly for goods like rice -- the report found that prices in February were beginning to decline.
The rise in prices for vegetables and meats fell by about five percentage points over January, the report stated.
Meat products have undergone the most significant falls in prices due to an oversupply, with the Thai broiler industry seeing an actual fall in prices for their products.
To overcome the decline, integrated processors in both the poultry and pork sectors are looking to reduce livestock numbers, in order to keep prices up.
