Middle East conflict and trade disputes drag Thai food exports down by 10.5% in early 2026

Total export value stood at 202.1 billion baht, prompting related agencies to slash the full-year target to 1.4 trillion baht.

Visit Limlurcha, vice chairman of the TCC and chairman of the Processed Food and Future Food Committee of the TCC, said that the contraction in January and February stems from a “perfect storm” of global and regional challenges.

Key factors include weakened global demand and uncertainty surrounding U.S. trade tariff policies, the strengthening of the Thai Baht, which has eroded price competitiveness, import restrictions by major trading partners, specifically Indonesia’s suspension of staple food imports, like rice, corn and sugar due to plentiful domestic stocks, and border tensions between Thailand and Cambodia, which have resulted in a loss of over 5 billion baht in monthly exports to Cambodia (~5% of total food exports).

Several other key markets have also contracted, including CLMV (Cambodia, Laos, Myanmar and Vietnam), ASEAN, the United States, the Middle East and Japan.

The forecast for the first quarter of 2026 remains grim. The conflict in the Middle East is expected to have had a direct impact on the food industry from March.

Products at high risk of a reduction in export demand include canned tuna, rice, processed sweet corn and canned pineapple. Meanwhile, indirect effects, such as rising energy prices, are expected to drive up costs across the entire supply chain, from fertilisers and raw materials to packaging and logistics.

Meanwhile, markets showing signs of growth include South Asia, the European Union, the Commonwealth of Independent States (CIS) and China.

In 2025, Thailand’s food exports were valued at 1.51 trillion baht, representing a contraction of 8.1%. This decline reflects mounting pressures from a global economic slowdown, U.S. tariff measures, weakening purchasing power among trading partners, the appreciation of the Thai baht and the Thailand–Cambodia border conflict.

Despite the downturn, ‘Future Food’ is emerging as a resilient silver lining. Paiyada noted that this sector has grown steadily over the last five years, with exports rising from 79.5 billion baht in 2020 to 134.4 billion baht in 2025.

According to Paiyada Hanchaisuksakul, president of the NFI, "Future Food is becoming the industry's new engine, increasing its share of total food exports from 7.4% to 8.9%."

The sector remains, however, highly concentrated. Health and wellness food dominates the segment with a 90.3% share. Medical food accounts for 4.8%. Meanwhile, alternative proteins and organic foods together make up less than 5% and have seen a slight decline due to high costs and limited market acceptance.

Overall Thailand’s food export market in 2025 reflected a more diversified market structure. Currently, China is Thailand’s largest export market, accounting for 22.3% of total food exports, followed by ASEAN at 11.5%, the United States at 11.3% and CLMV at 10.8%.

Several major markets continue to contract due to global and regional economic conditions, as well as concerns over the U.S. trade war. Exports to China declined by 11.6%, ASEAN by 13.6%, CLMV by 10.0%, Japan by 8.9% the Middle East by 16.7%, and Africa by 25.2%.

Meanwhile, markets that are still growing include the European Union (+5.2%), South Asia (+35.5%), the United Kingdom (+1.7%) and the CIS (+5.8%), supported by concerns over food security, particularly in the EU, which has continuously increased food imports to cope with the impact of the Russia-Ukraine war.

The outlook for the first quarter of 2026 (January–March) sees Thai food exports expected to reach 305.9 billion baht, down 11.5%, continuing the contraction from the previous year.

In March, the export sector began to be directly affected by the war in the Middle East, disrupting shipments through the Strait of Hormuz to Gulf Cooperation Council (GCC) countries and re-exports from the UAE to many countries in the Middle East and Africa (MENA).

Products heavily dependent on the Middle East market, such as canned tuna, rice, flavored sweet corn, and canned pineapple, are at high risk of being affected.

Products moderately dependent on this market, such as chicken, instant noodles and coconut-based beverages (4–5%), will be less impacted.

Meanwhile, global demand remains weak due to economic uncertainty, rising inflation and price competition.

The joint organizations have revised the 2026 export forecast down to 1.4 trillion baht, a 7.3% decrease year-on-year. A sharp contraction of -17.7% is anticipated in the second quarter before a potential slight recovery in the latter half of the year, provided that the Middle East conflict does not escalate further.

For export markets expected to expand, such as South Asia and the European Union, the group of markets projected to contract the most re in the Middle East, at -50.7%, because most destination countries rely on cargo ships passing through the Strait of Hormuz. The U.S. market is expected to shrink by 12.8%.

Last year, the impact of tariff measures on Thai food exports was not yet clear, since long-shelf-life products, such as pet food, canned tuna and canned pineapple saw temporary stockpiling.

Meanwhile, demand for short-shelf-life products, such as rice, shrimp and ready-to-eat meals declined, reflecting a shift.

While the outlook is challenging, the NFI suggests that a potentially weakening baht and global concerns over food security could provide a boost for Thai exporters at the back end of the year, as nations look to stockpile essential goods.