Oil prices Fertilizer and electricity prices are set to rise due to war impacts. Thailand is expected to suffer if the conflict extends beyond one month. Experts estimate product costs will increase by 5 to 10 baht, agricultural goods will become 10-15% more expensive, and Thai inflation will surge. They warn that holding cash is the safest option.
The war attacking Iran threatens to affect the entire Middle East, especially global oil prices, which are likely to rise after Iran closed the Strait of Hormuz, blocking oil from the Persian Gulf from reaching the world market.
The impact on Thailand is expected if the war lasts up to one month. Currently, the Thai stock market has fallen amid fears over the conflict triggered by attacks from Israel and the United States.
Thai products are poised for price increases. Thairath Online's special news team reports Associate Professor Dr. At Phitsarananich, an independent academic and international economics expert, analyzed that the attack on Iran, Iran’s response by closing the Strait of Hormuz, and strikes on several U.S. bases in the Middle East raise the possibility of a prolonged war, which will affect Thailand’s consumer goods as follows.
are clearly trending upward, affecting consumer goods by raising production costs. For example, if oil prices reach 100-120 dollars per barrel, product costs will increase by 5 to 10 baht, pushing Thai inflation up by 1-2%. This will cause almost all retail prices in Thailand to rise, especially consumer goods with higher transportation and production costs.
rising will impact agricultural products because fertilizer accounts for about 30-40% of Thailand’s agricultural production costs. Therefore, the Middle East war will raise agricultural production costs in Thailand, increasing rice prices and the costs of producing rubber and palm oil. This will cause agricultural prices to rise approximately 10-15%.
have risen by 15-20% in the U.S. gas market, which is used for power generation. This is likely to increase Thailand’s electricity production costs by about 1 to 1.50 baht per unit. Currently, Thai consumers pay between 3 and over 4 baht per unit. If production costs rise, Thai electricity prices could increase to 4 to 5 baht per unit.
If the Iran war lasts more than one month, Thai product prices will clearly increase, especially oil, electricity, and agricultural products.
The Thai government’s solution must be to freeze prices of oil, fertilizer, and electricity if the Iran war extends beyond one month, for example, by compensating through the oil fund. At the same time, it must prevent businesses from exploiting the situation to raise prices.
For Thai citizens, it is essential to conserve, especially avoiding unnecessary expenses. People should hold as much cash as possible to cover future spending, in case the war intensifies.