Hot weather to feed Thailand F&B sales in second half

THAILAND'S consumer sector will be led by food and beverage in the second half of 2019, on relatively strong food inflation and a pick-up in drinks consumption, a report has said.

As the increase in food and non-alcoholic drink costs continues to outpace headline inflation, Nomura research analysts Thanatcha Jurukul and Rajesh Kumar are banking on climate-related challenges to meat and vegetable supply to push prices up.

The trend could continue on hotter weather in the next three months, as well as headroom for higher pork prices and rising export demand for chicken in Japan, Europe and the growing Chinese market, the analysts wrote. They also cited "resilient consumption demand".

Meanwhile, drinks consumption should pick up year on year on hotter weather and a beer-fuelled recovery, as the impact fades from a late 2017 excise tax hike.

"Alcohol beverage sales are also likely to recover year on year, according to Thai Beverage's management, following growth in spirits sales in April and strong growth in domestic beer sales since January this year as reported by the Office of Industrial Economics," the analysts noted.

Official data has already pointed to a 12 per cent rise in the sales of beer, water, fizzy drinks and juice in April and May, the report added.