The European Union's plan to impose an anti-dumping duty on Thai sweet corn has forced some operators to shut down and more will soon follow, according to the Thai Food Association.

Pornchai Pinvises, association vice president and chairman of the Sweet Corn Processors' Group, said orders for sweet corn had dropped sharply since the EU's decision to impose the anti-dumping duty.

Most European importers have suspended placing orders with Thai manufacturers since early this year. Hundreds of sweet-corn processors and millions of workers in the industry, from farmers to factory workers, are in trouble, he said.

One producer of canned sweet corn in the North has already ceased production and other factories have downsized to minimum production capacity in order to survive.

Pornchai said that until now Thai sweet corn had been subject to a 15-per-cent import tariff to the EU market, which has been the biggest export market for the product, accounting for 50 per cent of export volume.

The EU is expected to decide later this month whether to impose an anti-dumping levy of between 3.1 per cent and 12.9 per cent on Thai sweet corn.

It is also planning to propose a "price undertaking" measure for Thai sweet-corn exporters as an alternative for remaining exports, leaving them, Pornchai said, at a price disadvantage against local producers.

"Exports to the EU will drop dramatically this year because of the impact of the anti dumping duty," Pornchai said.

He urged the Thai government to challenge the EU's

anti-dumping duty as an unfair trade practice before the World Trade Organisation (WTO). Otherwise, he said, the Thai sweet-corn industry may simply disappear.

According to the Foreign Trade Department, Thai sweet-corn exports to European countries began dropping gradually after the EU started to investigate price-dumping charges against Thailand in 2004. Sweet-corn exports to the EU were then worth about Bt1.4 billion. The figure fell to Bt1.34 billion in 2005 and to Bt1.21 billion last year.

Commerce Minister Krirk-krai Jirapaet, who met representatives of the Thai Food Association yesterday, has asked the Foreign Trade Department to consider filing a case with the WTO as a possible solution to the problem.

Pornchai said the chances of winning such a case were good because European legal advice suggests that the EU action is an unfair trade practice.

European producers, particularly those in France, have urged the imposition of a high levy on Thai sweet corn because local manufacturing costs are higher than those in Thailand.

Thailand is the third-largest supplier of sweet corn to the EU after France and Hungary. French producers enjoy more than 80 per cent of the market from farms in both France and Hungary. Thailand holds only a 12.7-per-cent share.

Petchanet Pratruangkrai

The Nation