Thai fertilizer demand slows as rice prices fall

Thailand's domestic fertilizer demand is slowing due to low export prices for rice, despite favourable rainfall this year.

Above normal rainfall during May-July have supported healthy demand for fertilizers in the domestic market. From May to June, the northeastern region — Thailand's main rice-growing area — received between 21-47pc more rain than normal, according to the Thai Meteorological Department. In July, the downgraded typhoon Wipha continued to bring heavy rains across the country. But importers have noted a slowdown in domestic demand mainly because farmers have lower cash flow due to weak rice export prices.

Thai 100pc B white rice export price in June 2025 fell around 33pc on the year under pressure from lower Indian and Vietnamese rice prices, according to the Food and Agriculture Organization (FAO) data. As a result, Thailand's rice exports during January-June 2025 fell 27pc on the year, while Vietnam's exports rose by 6pc and India's by 38pc.

The Thai government has launched a campaign this week offering a 200 baht/bag, or 4,000 baht/t, discount for fertilizers, one importer said. There will be three events, each offering around 500t of bagged fertilizers with the discount. But most importers don't think this can significantly boost domestic demand.

Import demand started to slow down in July as current stocks were enough to meet domestic needs, importers said. Thailand's rainy season is expected to last until mid-October, but this is also unlikely to raise domestic fertilizer sales as farmers have already bought most of their requirements. Continued weak demand from farmers could reduce import interest for the rest of the third quarter.

By Angie Liew