MLBA6: December / January 2009
Retooling the Thai meat industry
Just a few months ago, Thailand was optimistic about its meat exports. Broiler exporters were talking about a 10-15 percent growth this year, after opening new markets in Europe and the Middle East and in the light of a free-trade agreement with Japan that cut down poultry tariff.
The pig sector, whose export represents a mere 1 percent of its total production, was projecting 2008 overseas sales of THB1.5 billion from last year's THB1.4 billion. Despite a local price depression that has dragged on for months now, the shrimp industry was optimistic nonetheless. It had originally targeted 400,000 tonnes of export this year, 50,000 tonnes more than in 2007.
Thailand is ranked as the world's seventh largest food exporter. In the first half of the year, its food exports value totaled THB379.86 billion. It was expecting some THB750 billion for the whole year. This was even seen to rise to THB1 trillion a year from 2012.
All this optimism is gone as the world's biggest economies now teeter on the brink of a recession, triggered by a financial meltdown in the US. New studies by the Bangkok-based Centre for International Trade Studies of the University of the Thai Chamber of Commerce say that the country's 2008 food export target of 15-19 percent has become unachievable. The studies are in fact looking at a flat growth at best - or even a negative growth, depending on how bad the situation turns out to be in the next few months.
In a recent survey of some 300 exporters, the Thai Chamber of Commerce found that 68.9 percent of them expect to feel the pinch these last three months, with 77 percent of them expecting the slowdown to last until the first quarter of next year. A number of them said they have begun to feel the impact of the current crisis. Some companies have reported difficulties in obtaining Letters of Credit from commercial banks, as they are forced to put up bank guarantees to reduce risks.
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