Important factors eroding the Kingdom's competitiveness are not only tougher competition in the world market, but also the stronger baht, which has reduced export value.

The National Food Institute of Thailand said the Kingdom's status in terms of world food suppliers dropped from 14th place in 2000 to 15th in 2005. Its share of the market fell from 2.62 per cent to 2.16 per cent.

Of the total world food-trade figure of US$602 billion (Bt21.59 trillion), the US is the world's largest supplier, followed by France, the Netherlands and Germany.

Food experts and enterprises yesterday said it was a critical problem for Thailand, because food was the Kingdom's major export. They advised exporters to monitor consumer demand and trends in the world market closely, in a bid to maintain Thailand's status as a major food exporter.

The Food Intelligence Centre at the institute predicted food exports this year would grow only 6.3 per cent to Bt594.8 billion, down from 7.7-9 per cent growth last year.

The seminar "Strategies for Boosting Thai Food's Industrial Competition in 2007" was co-hosted by the institute and the Office of Industrial Economics yesterday in Bangkok. The event was aimed at increasing Thailand's export competitiveness and educating food exporters to increase export volume and value.

Yuthasak Supasorn, executive director of the institute, said the strengthening of global competitiveness and the baht's fluctuation were risk factors for Thai food exports.

He said rising non-tariff barriers were another key factor that would affect exports.

Yuthasak advised food manufacturers and exporters to increase food-safety standards and develop a traceability system as part of food production.

Since world markets will reflect the trend towards health consciousness, an increase in standards of food manufacturing will increase export growth, he said.

Office of Industrial Economics director-general Atchaka Sibunruang Brimble said Thailand's food exports faced a serious situation, because of rising competitors like China and Vietnam.

She said exporters should be aware of rising non-tariff barriers in major markets like the US, the EU and Japan.

Atchaka suggested exporters target new markets that had a high demand for food, such as South Africa and those in the Middle East and Southeast Asia.

Anurat Khokasai, chief marketing and operations officer at Prantalay Marketing, said the volume of food exports had not decreased, but rather their value was down.

The strengthening baht has increased exporters' burden. Exporters should decrease their manufacturing costs and explore new markets to increase growth.

Anurat said that, for instance, his company had reorganised its manufacturing systems to cut costs and signed contracts with shrimp farmers to guard against the effects of the baht's fluctuation.

The company is also starting to explore new markets, such as Singapore, Hong Kong, China and the Middle East, instead of focusing only on key ones. This strategy will also help boost distribution channels.

Betagro Group executive vice president Vasit Taepaisitphongse said exporters must pay more attention to research and development and add value to their products if Thailand was to remain a major food supplier.

He said world markets were concerned with not only large volumes of food production, but also with the packaging, design and quality of the products.

Petchanet Pratruangkrai

The Nation