Political woes, stalled FTA talks hit trade of livestock products

Corporate May 10, 2014 00:00

By Kwanchai Rungfapaisarn
The Na

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The current political problem may have a serious impact on the export of livestock products to particular markets in Europe as free-trade negotiations have been delayed because of the lack of a functional government in the Kingdom.

The lifting of Japan’s 10-year ban on chicken imports from Thailand since December 25, however, should help the situation. Poultry exports are expected to reach between 630,000 and 650,000 tonnes this year, up from 530, 000 tonnes last year. 
Thailand could become the first Asian country to export frozen chicken to Japan. Tokyo imposed the ban in late 2003 after some incidences of bird flu were found in Thailand in the fourth quarter; a major outbreak was confirmed in early 2004. The safety of Thailand’s poultry was again in focus after another outbreak in 2008, but it now has been declared free of the disease.
Pisit Ohmpornnuwat, chief operating officer for overseas trading at Charoen Pokphand Foods (CPF), said he would like the political conflict to be settled as well as a new government to be set up quickly, so that all international trade and economic deals between governments, such as free-trade agreements, can resume.
“We also hope that the Asean Economic Community, which will be fully effective next year, will encourage higher consumption of livestock products in Thailand and other countries in the region, as such regional economic integration will allow a migration of people among countries within the region,” he said.
Prasit Chalongchaichan, senior vice president of CP Merchandising, said that in addition to Japan, many markets such as South Korea, Hong Kong, Singapore and the Middle East would be more open for chicken exported from Thailand. 
He said CPF’s export of frozen chicken could reach about 140,000 tonnes this year, up from just under 100,000 tonnes in 2013. Of total chicken export this year, between 50,000 and 60,000 tonnes will go to Japan, about 70,000 tonnes to Europe, and the rest to other markets including those in Asia.
Prasit added that the company expected to earn Bt15 billion from poultry export this year, up from Bt11 billion last year.
“Thailand has greater competitiveness when compared with rival countries such as Brazil,” he said, adding that the key to its success was product quality. 
The economic situation in Brazil has improved rapidly over the past 10 years and that has driven domestic consumption in that South American country. Chicken consumption there is now about 30 kilograms per person per year, compared with 17-18kg in Thailand.
CPF has major poultry-processing plants in Bang Na, Min Buri, Saraburi and Nakhon Ratchasima. Those facilities have combined capacity to process between 800,000 and 900,000 chickens a day, or 5 million to 5.3 million chickens a week.
Viboon Supakarapongkul, executive vice president for seafood at CPF, said Thailand exported about 205,450 tonnes of shrimp last year, down from 340,000 tonnes in 2012. In the first two months of this year, total shrimp exports were about 19,000 tonnes, down from 32,000 tonnes a year earlier. 
“We have seen a decline in shrimp exports in the first two quarters of this year compared with the same period last year. However, the situation should get better in the second half. We are looking for the export situation to pick up in the third quarter,” Viboon said.
He said CPF had capacity to produce about 40,000 tonnes of fresh shrimp this year. In the past, annual capacity could reach about 80,000 tonnes.

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