July 21, 2008

 

Thai seafood producers to benefit from WTO ruling against the US

 
 

A WTO rule against the US anti-dumping rules would be highly beneficial for food producers Charoen Pokphand Foods and Thai Union Frozen Products, according to industry analysts. 

 

The US will have to stop imposing the "continuous bond requirement", or C-bond, on Thai imports after the WTO declared it was illegal. In addition, the US is to return the THB12 billion (US$360.2 million )  in C-bond guarantees to Thai exporters. Previously, in order to export to the US, Thai shrimp exporters have had to pay the bonds to ensure they paid up on the duties. The return of the bonds is expected to help Thai companies increase their cash flow.

 

The US market outlook for Thai shrimp will likely become brighter next year, which could lead to higher profit projections for listed exporters, analysts said.

 

Both stocks enjoyed higher prices yesterday. CPF's stock rose 3.57 per cent to THB3.36, TUF was up 1.27 per cent to THB15.90. 

 

Shrimp exports to the US account for 20 per cent of CPF's sales. Without having to post the C bond, sales and profits could rise by THB400 million per quarter. TUF could also increase its sales from THB3.5 billion (US$105 million) to THB4 billion (US$120 million). 

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