August 7, 2006

CP Foods says new EU quotas would hurt Thai poultry exports

A new EU quota for cooked-chicken imports would hurt Thai poultry exports, according to Adirek Sripratak, the president and CEO of Charoen Pokphand Foods Plc.

Under the new EU proposal, processed products over the quota would be taxed at 53 percent, while products within the quota would retain normal rates. The exact quota has not yet been set.

Adirek said the EU market was expected to account for one-third of Thailand's projected exports of 300,000 tonnes this year.

Chicken exporters are concerned that the EU's new tariff quota system would negatively affect exports.

Thailand can only export processed chicken to the EU as fresh products had been banned since the resurgence of bird flu in 2004. Cooked chicken products are taxed at 10.9 percent currently.

The EU is considering global tariffs to protect its major producers in countries including the Netherlands, France and Belgium.

The Thai Commercial Office was expected to negotiate with the EU, according to Nuntawan Sakuntanaga, the deputy director-general of the Foreign Trade Department. The EU gave its trading partners 90 days, starting from mid-June, to negotiate. 

Thailand is likely to ask for a quota of more than 10,000 tonnes per month, the amount it is exporting to the EU currently, Nuntawan said.

Nuntawan said the ministry would negotiate for a greater quota rather than lower tariffs because it wanted to maintain current volumes.