Food export growth of 6% depends on stable baht

Food exports from Thailand are expected to expand by 6 per cent compared with last year to Bt1.03 trillion in value if the global economy grows by 3.5 per cent as forecast. The target is based on an average exchange rate of Bt29.50 against the US dollar throughout the year.

The Thai Chamber of Commerce, the Federation of Thai Industries and the National Food Institute (NFI) jointly announced how food exports performed last year and the trend they expected this year.

Export of poultry is forecast to grow by 14.5 per cent to Bt82 billion in value, followed by cassava at 6.4 per cent to Bt68 billion, said Petch Chinabutr, president of the NFI.

Export of pet food is expected to reach Bt27.3 billion, up 6.7 per cent, canned and processed fish excluding tuna by 12.8 per cent to Bt27 billion, seasoned products such as chilli sauces by 9.6 per cent to Bt17 billion, and processed tuna by 6 per cent to Bt87 billion.

However, the strengthening of the baht has threatened the food-export sector's competitiveness. If the currency hit Bt28.50, the forecast export value this year would drop 2 per cent to Bt1.009 trillion, or only 3.9-per-cent growth from 2012. Thailand would lose advantage to Vietnam, as the dong has depreciated 0.21 per cent.

The export products that would be hit most if the Thai unit strengthened by Bt1 are cassava, rice, processed fruits and vegetables, and processed fish.

Last year the total value of Thailand's food export was Bt971.689 billion, up 0.8 per cent from 2011.

The top five export products in terms of value share are rice at 14.6 per cent, sugar 12.5 per cent, shrimp 9.9 per cent, canned tuna 8.4 per cent, and poultry 7.4 per cent.

Food export to Asean last year expanded 9.7 per cent, to Japan by 5.8 per cent, and China by 19.1 per cent, while that to the United States dropped by 9.8 per cent and to the European Union by 6.4 per cent.

Asean was still Thailand's top food-export market, accounting for 22.4 per cent, followed by Japan at 15.3 per cent, the US at 11.5 per cent, the EU 10.9 per cent, Africa at 9.7 per cent, and China at 8.8 per cent.

Thailand's share of the global food-export market last year was unchanged at 2.57 per cent, ranking 12th. It was in third place as a rice exporter, trailing India and Vietnam.