June 25, 2009

The EU's likely reinstatement of its import quota for Thai salted chicken next year may spell boon for Thailand's chicken industry.

Before EU banned Thai salted chicken products in 2004 due to bird flu outbreaks, it had allocated a quota of 92,610 tonnes a year of Thai salted chicken.

The EU has used a quota system for chicken from Thailand and Brazil, its major chicken supplier, since 2007 in an effort to protect its major producers in countries including the Netherlands, France and Belgium.

The EU gave Thailand a bigger export quota allocation of 252,643 tonnes: 160,033 tonnes of processed chicken and 92,610 tonnes of salted poultry. However, after the bird flu outbreak, Thailand failed to exercise its quota for salted poultry. In 2008, Thailand shipped 160,033 tonnes of cooked chicken worth US$759 million to the EU.

Under the quota, the tariff is 8 percent of the price per tonne while chicken exported above the quota is taxed at 53 percent.

Auswin Chotitawan, managing director of Golden Line Business Co, a subsidiary of Saha Farm Group, said the reinstated quota for salted chicken would increase Thailand's chicken exports by about US$291 million a year.

For the first 4 months, cooked chicken shipments were worth US$447 million. In 2008, total exports of the products were worth US$1.56 billion.

Recently, Thai authorities and business executives met with Renate Nikolay, a member of the cabinet of the EU Trade Commissioner in Belgium, in a plea for EU to scrap its import ban on fresh chicken from Thailand.

Thai delegate Krisda Piampongsant, an inspector-general with the Commerce Ministry, said Thailand has been free from bird flu for over 200 days since November 12 2008 under the guidelines of the World Organization for Animal Health.