Political woes, trafficking issue cloud seafood industry's 2014 outlook

Corporate December 23, 2013 00:00

By Pichaya Changsorn

The Natio

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Thailand's political instability could take a heavy toll on the country's seafood industry, warned the chief executive officer of a leading canned and frozen seafood company.

Thiraphong Chansiri, whose Thai Union Frozen Products group is the world’s top exporter of canned and frozen tuna and shrimp, also said there is a "strong likelihood" that Thailand would be downgraded to Tier-3 in the US State Department’s "Trafficking in Persons" (TIP) report when Washington reviews the rankings next year.

If Thailand is downgraded to the lowest tier on the TIP, its seafood industry, along with four others, including sugar and textiles, will face problems exporting their products to the US market, which absorbs half of all Thai seafood exports, he said.

"There is a high likelihood [that Thailand will be downgraded to the Tier-3], especially now that the government’s position is not so strong," said the TUF president.

Thailand is currently run by a caretaker government following a decision earlier this month by Prime Minister Yingluck Shinawatra to dissolve Parliament and call for a nationwide election to be held on February 2. The steps were taken to defuse anti-government protests led by former Democrat Party MP Suthep Thaugsuban. Last year, the US government report, which grades 188 countries and territories on their efforts to tackle trafficking, placed Thailand on its Tier-2 watch list for a fourth consecutive year.

Thiraphong said the TIP situation for Thailand is "very serious" and a downgrade to Tier-3 could severely damage small and medium-sized enterprises and farmers involved in the seafood industry’s supply chain, while big companies could adapt and survive. One-third of TUF’s revenues are currently derived from the US market.

"We’re still evaluating what we would do, if we are hit [by a TIP downgrade]. What’s bad today is that even the US Embassy here is still not satisfied [with Thailand’s anti-trafficking efforts]," he said.

However, Thai Shrimp Association president Somsak Paneetatyasai was quoted as saying in an interview last week that with support from the government, eight fishery associations recently joined forces to form a federation to help boost the image of the Thai fisheries industry in the eyes of the US. Thus, he said, the rating should not be lowered.

Thailand is the world’s third-largest exporter of seafood. According to a Bangkok Bank report, the Kingdom shipped nearly US$2 billion (Bt64.8 billion) worth of "prepared and canned seafood" to international markets during the first five months of 2013.

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