Trade Office Analyzes Three El Niño Cycles to Guide Agricultural Planning

The Trade Policy and Strategy Office (TPSO) analyzed data from three past El Niño cycles and found that inflation rates for goods and food differed across each episode. The office proposes linking climate data, yields, and market conditions to prepare proactive measures. Mr. Nanthapong Chiraleisong, Director-General of the Trade Policy and Strategy Office (TPSO) at the Ministry of Commerce, revealed that the El Niño phenomenon creates uncertainty and volatility in agricultural production volumes, stemming from changes in rainfall and temperature that affect yield per rai and shift the timing of harvests entering the market in each region away from normal patterns. TPSO therefore analyzed inflation movements in key food groups to draw lessons from previous El Niño events, examining data by product type, time period, and market context. The study covered five food categories — rice, meat, eggs, fresh vegetables, and fresh fruits — across three El Niño cycles: 2015–2016, 2018–2019, and 2023–2024. Comparing average inflation rates per category during and after each El Niño period within the study framework revealed three key findings. First, food items do not adjust in the same direction even when facing the same climatic conditions during the same period. Across all three cycles studied, no single cycle showed all five categories with positive average inflation simultaneously. For example, during the 2018–2019 El Niño, rice and meat recorded average inflation of 5.3% and 6.4% respectively, while fresh fruit averaged -1.6%, reflecting the need to consider product-specific factors including yields, seasonality, costs, and market demand. Second, inflation for the same product category moved in different directions across cycles. For instance, average meat inflation stood at 6.4% in the 2018–2019 cycle but fell to -15.3% in the 2023–2024 cycle. The egg category averaged -3.1% in the 2015–2016 cycle but rose to 6.4% in the 2023–2024 cycle, showing that experience from one cycle should not be used to predict prices in the next. Third, monitoring should not end when the El Niño phenomenon subsides, as some categories continue to shift afterward. For example, in the 2018–2019 cycle, rice inflation averaged 5.3% during El Niño before rising to an average of 9.4% in the post-period, while eggs in the 2015–2016 cycle shifted from an average of -3.1% to +8.1% afterward. Continuous tracking of yields and market conditions is therefore warranted even after weather returns to normal. TPSO emphasizes that food inflation changes stem from multiple factors; the study does not indicate El Niño as a direct cause of price changes but helps identify patterns and periods to watch, requiring consideration of other factors including water availability, irrigation systems, yields, production costs, and market demand. Based on the analysis, TPSO proposes shifting from reactive price monitoring to proactive planning using data — linking weather forecasts, rainfall and water resources, planted areas, yields, stock levels, costs, prices, and international trade situations to analyze signals for specific products and areas on a case-by-case basis, supporting preparation of measures aligned with production and marketing timelines. In the initial phase, TPSO proposes prioritizing monitoring of six agricultural products, selected by their supply-chain roles and market characteristics, divided into two groups: those linked to food costs — rice, cassava...