Falling prices of key crops including natural rubber and oil palm were the main factors in declining exports from the South last year, says an economist.
Shipments of major products from the region were valued at 17.2 billion baht, down by 16.9% from 20.7 billion in 2011, Pruitipong Srimachan, a senior executive in the Bank of Thailand's southern office, said last Friday.
He attributed the slow exports to struggling economies in Japan, Europe and the US.
Overall farm production rose by 4.3% from 2011, but farmers' earnings plunged by about 23% as prices fell by 26% on average.
The Agriculture Ministry said prices of raw rubber sheet decreased to an average 93-94 baht a kilogramme last year from 132 baht in 2011.
The weak market has continued this year, with the price down to 84 baht last week.
Oil palm also had a weak performance. The price of palm nuts dropped to a range of 3.50 to four baht per kg this month, down from a range of six to 6.30 baht farmers earned last July.
Farm crops are expected to face a difficult market through the first quarter.
However, the central bank forecasts the tourism industry and strong consumer spending will help to offset the decline and boost the southern economy.
The number of tourist arrivals to the 14 southern provinces was reported at 6.2 million last year, up by 9.3%.
Average hotel occupation improved to 62.3% from about 50% in 2011.
The central bank's southern office recently held a meeting with operators in sectors including rubber, seafood, oil palm, tourism and property to address issues of concern.
"Many foresee the slowdown in China and the sluggish economies in Europe and the US as great threats," Mr Pruitipong said.
Although the rubber industry is approaching the low season, traders fear weak demand abroad will continue to dampen prices.
Traders predicted oil palm production is expected to rise by 10-15% this year and cause prices to stay at about 3.50 baht per kg.
Mr Pruitipong said tourism operators remain upbeat, especially about the current high season.
The strong tourism industry has benefited the property sector, particularly the development of residential units for businessmen migrating from other regions.