July 19, 2007

Thailand hopes to stem falling market share in chicken exports to Japan

Thailand's production of broilers in 2006 totalled 971.4 million birds, an increase of 18.9 percent  over 2005.

Higher production standards leading to higher quality chicken were responsible for the increase.

In 2006, Thailand's chilled and frozen chicken and cooked chicken exports totalled 259,700 tonnes, up 9.1 percent from 2005. These exports earned Thailand Baht 29,400 million, an increase of 5.6 percent . Export growth was due to the diversity of Thai chicken products, especially cooked chicken, and to food safety where Thailand was rated highly.

However, Thailand has had to fight more fiercely for exports to Japan since Brazil expanded on its chicken exports. This competition has led to a decline in chicken prices in Thailand's main chicken market.

In 2006, about 98 percent  of Thailand's chicken exports were cooked chicken. Japan and the United Kingdom together imported over 75 percent  of the total. The remaining 2 percent were frozen chicken again mostly taken by Japan and the UK.

Despite bird flu reducing the initial Thai chicken exports, Japan remains a top importer of Thai chicken, taking up to half its exports each year.

Although Japan has agreed to a gradual reduction of import duty from 9.0 percent  to 8.5 percent for Thai chickens within five years, export growth will not be easy due to Japanese concerns on food safety and the fact that Thailand has yet to fully eradicate bird flu.

Thailand's export of cooked chicken to Japan more than doubled from THB 4,700 million in 2002 to more than THB 12,751 million last year.

Under the JTEPA, Thailand can hope to increase export of cooked chicken as tariffs would be halved from 6.0 percent to 3.0 percent within five years.