32
APR2017
FOOD FOCUSTHAILAND
SCOOP
Remark:
* The food industry reported in this researchexcludes beverages
** Projected figures inUSD billion and figures in parentheses arepercentage changes from theprevious year
Source:
TheMinistry of Commerce, compiled andanalyzed byKResearch (As of January 19, 2017)
Product*
USA, Japan,
China
Japan
UK
Japan, USA,
China, Vietnam
Africa
China
•
Shrimp productionwill gradually recover after theEMS outbreak
has successfully been controlled.
•
Downside risks to the industry have eased gradually, e.g., IUUFishing
warning.
•
Flooding in southernThailand not exceedonemonth.
•
Chicken exports have abright outlook, especially processed chicken shipments
to Japan.
•
SouthKoreaallowsThailand toexport chilledand frozen chickenafter banning
fresh, chilled and frozen chicken imports fromThailand.
•
H5 avian flu outbreaks inmany chicken importing countries openexport
opportunities for Thailand.
•
Demand for canned pineapple from key trade partners, e.g., theU.S.
andNetherlands, remains strong.
•
Pineappleproduction is projected to increase after drought.
•
Abumper crop seen inmajor rice exporting countries.
•
Global demand for ricemay decline due to the sluggisheconomies of
major importing countries.
•
Prolongedeconomic slowdown inChina
•
China’s releaseof stockpiled corn as a substitute for tapioca is crimping demand
for Thai tapioca.
Processed fishery and
aquatic animals
• Shrimp
Processed livestock
andmeat
• Chicken
Fresh and processed
fruit and vegetable
Rice
Tapioca
5.5 (0.4)
1.82 (7.7)
3.0 (1.6)
2.5 (5.2)
2.3 (1.0)
4.1 (1.8)
2.9 (-15.8)
5.7 (3.0)
2.0 (11.0)
3.2 (4.5)
2.6 (5.0)
2.4 (2.0)
3.9 (-4.8)
2.8 (-1.4)
Export Value
2016**
Export Value
2017**
MajorMarket
Issues in2017
Table 1
Thai FoodExports in 2017
Due to the rosy outlook foreseen inThai chickenexports, it is expected that
the value of processed livestock andmeat shipments for 2017will increase 4.5
percent YoY toUSD3.2billion, ledby chickenwith theexport valueprojected to
increase 5 percent YoY to some USD 2.65 billion. However, Thai chicken
processors and exportersmust be vigilant towards avian diseases by avoiding
chicken breeds imported from Europe where bird flu outbreaks have been
confirmed in many countries. They should maintain high product quality and
standards, aswell.
Fruit and vegetable exportsexhibit steadygrowth,
ledby cannedpineappleand sweet corn
An important product in the fruit and vegetable category is canned pineapple.
AlthoughThai canned pineapple no longer enjoys theEUGSP privileges since
2001, it remainscompetitive relative to thoseof our rivals. In2017, it isexpected
thatourcannedpineappleexportswillgrowsubstantially, inbothvalueandvolume,
becausevolatility indomesticpineappleoutputdue todrought lastyearhaseased
and therewill likely be strong demand frommajor trade partners, e.g., theU.S.
andNetherlands.
Our canned sweet corn exports have also performedwell, thanks to strong
demand from key trade partners, e.g. Japan. Such exports are normally geared
towardsmediumand low income Japanese consumers, becausewehavea few
rivals. Thus, Thai cannedsweet cornshipmentsshouldcontinue togrow in2017
even if theEU renews its anti-dumping (AD) duty on this product this year.
As a result, KResearch is of the view that the overall fruit and vegetable
exports for 2017 will grow 2 percent YoY to USD 2.4 billion, driven by canned
pineapple and sweet corn shipments.
Rice exports are at risk amid sagging demand from
major tradepartners
In 2017, it is expected that there will be substantial rice supplies coming from
major rice exporting countries, especially Thailand and Vietnam, after their rice
outputswerehitbyseveredrought lastyear.Sinceglobal ricedemand isprojected
todeclinewitheconomicconditions inmajor importingnations, riceexport prices
will likely trend lower.However, highdomestic ricesuppliesshouldhelpoffset the
overall decline in riceexport valuesomewhat.KResarchhas forecasted thatThai
rice export in2017will stablewith the value of USD4.2billion.
Tapioca product exports remain a cause for
concernon the slowingChinese economy
China isamajor tapiocaexportmarket forThailand.However, itsanemic
economy and attempt to release stockpiled corn, being a substitute of
tapioca, haveweakeneddemand for Thai tapiocaproducts. Inaddition,
abumper cassava crop in2017will likelydepress tapiocaprices future.
Asa result, thevalueofThai tapiocaexportsmay fall 1.4percentYoY to
onlyUSD2.85 billion.
Policies of key trade partners warrant close
monitoringahead
Although Thailand’s food exports and food industry seem promising in
2017, businesses must monitor and adjust to changing environment
ahead. In particular, the food industry, which directly affects well-being
of consumers, will have to face tariff and non-tariff trade barriers.
Nevertheless,many leadingcompanies inThailandhavemadesignificant
adjustments to avoid those trade hurdles by investing in certain
businesses abroad. Even this may crimp the country’s export income,
their overseas investments will translate into higher national income.
Meanwhile, the growing popularity of Thai cuisine and proliferation of
Thai restaurantsabroadshouldsignificantlybolster theThai food industry
through increasingdemand for ingredients and seasonings ahead.
For Thai exporters who are still unable to invest abroad, notably
SMEs, they will need to maintain good product quality and standards,
e.g., through implementing the traceability system, seeking new export
markets, andaddingvalue to theirexport products.Theymust alsokeep
abreast of international trade policies of leading economies and trade
partners, inparticular theU.S. followingapresidential transition, aswell
as EU political issues, e.g., theBrexit and general elections scheduled
inmanyEU states.
