Page 36 - FoodFocusThailand No.167 February 2020

SPECIAL REPORT

Key Products with Prospects
2019
• Fresh, chilled, frozen and dried fruit
• Livestock products
(i.e., frozen, processed chicken)
• Wheat products
• Non-alcoholic beverage
2020
• Fresh, chilled, frozen and dried fruit
• Wheat products
• Non-alcoholic beverage
• Spices, herbs, and condiments

Need to Know fishery products, including canned and processed seafood, are likely

to contract since some large-scale companies from Thailand have
expanded their production and distribution facilities into Thailand’s
trading partner countries to serve the local markets. The relocation of
their plants may eventually reduce the number of outbound shipments
Table 1 Thailand’s Food and Beverage Exports to the World Market from Thailand. Moreover, the consumers’ purchasing power is affected
Unit: million USD by the lackluster global economic performance. Also, Thailand does
Products 2018 2019f 2020f not enjoy some special trade privileges that Thailand’s neighbors do.
Food 23,807 24,600 24,000-25,000 The exports of beverage products, especially non-alcoholic beverage
(7.3%) (3.3%) (-2.5% to 1.5%) such as soft drinks, energy drinks, drinking water, etc., to major markets
such as the neighboring countries in the CLMV (Cambodia, Lao PDR,
Beverage 1,899 2,000 2,000 to 2,100 Myanmar, and Vietnam) may register weaker growth in the future
(16.3%) (5.3%) (0.0% to 5.0%) because many Thai companies have turned their interest in investing
Food and Beverage 25,706 26,600 26,000 to 27,100 and manufacturing products in those countries instead of exporting the
(7.9%) (3.5%) (-2.0% to 2.0%) products from Thailand.

Source: MOC, estimated by KResearch Factors Related to Food and Beverage Exports in
Note: 2020
1. Numbers in brackets ( ) are growth rates (% YoY)
2. Food and beverage products include the following items: 1. Market demand in Thailand’s trading partners is slowing down,
1) Products in the food category, i.e., vegetables and fruits (fresh/chilled/frozen/ intensifying the competition, particularly with trade rivals which offer
canned/processed), spices, herbs, coffee, grains, fishery products, livestock similar products with a cheaper production cost than Thailand:
products, canned and processed seafood, sugar, rice products, wheat products - In the Western countries, namely, the EU and US, consumer
and other ready-to-eat foods, condiments, milk and dairy products, chewing
gum and non-cocoa sweets, soups and flavored foods, fats from plants and purchasing power is adversely affected by the slowing global economic
animals, ingredients from meat, cocoa and flavorings, ice cream and other food conditions and the escalating trade war. The product groups which
processing products. may be impacted are fishery products, i.e., canned and processed
2) Products in the beverage category, i.e., alcoholic beverage and non-alcoholic
beverage seafood because these products heavily depend on the US and EU
markets (approximately 30% of all exports to the world market). Trading
In particular, some products with strong potential have outperformed partners may be able to find cheaper sources of fishery products with
our competitors’ such as fruits and livestock products. However, close similar quality and price than that of the Thai consignments, or they
attention should be paid to certain products that may experience a may shift to merchandise of the other Thai operators who have invested
downward trend due to a competitive market and the Baht’s appreciation, or established their production base in the EU and the US markets.
which erodes price competitiveness of the Thai products against our - In Asia, namely, China, Thai products may be challenged by
competitors’. Products with grim prospects include fishery products, competitors who can now grow durians like Thailand. Durian sellers in
including canned and processed seafood. Although the European Malaysia, Vietnam and the Philippines are trying to sell fresh durians
Commission earlier in 2019 lifted the “yellow card” status from Thailand in the Chinese market through bilateral trade talks (the negotiations
for its actions against illegal fishing, Thai fishery exports to the EU market are underway). In the future, Thailand’s market share may decrease.
continue to experience contraction. As for livestock products, the exports of fresh, frozen and chilled chicken
KResearch expects that the value of food and beverage exports in may experience a slowdown even though the demand in China remains
2020 to be around USD 26.0-27.1 billion or a growth rate between minus strong. This is because China now has many options from where to
2.0% and 2.0% YoY, which is weaker than 2019. In the food sector, import chicken, i.e., Brazil, which is No.1 import market, and other

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