November 8, 2011


Thailand's floods to affect Japanese food supply



The floods in Thailand are expected to affect Japan's food supplies as the latter imports large volumes of chicken and shrimp, together with food packaging materials, from the Southeast Asian country.


Japanese food companies may be required to take some countermeasures or prepare for supply shortages and price hikes toward the peak year-end shopping season, industry sources said.


Nippon Meat Packers Inc. and Ajinomoto Co. said they have already suspended their Thai chicken processing facilities due to the floods and plan to cover immediate supply shortages with domestic inventories and production at other facilities.


Little damage has reportedly been seen to shrimp breeding facilities in southern Thailand, but rather transport packing, with a major retail chain official saying, ''We may be able to avoid any impact of the floods on luxury New Year dishes and roast chickens for Christmas.''


But Maruha Nichiro Holdings Inc. cannot produce some products due to shortages of cardboard and other packaging materials for transporting frozen food products from Thailand. It is considering procuring such materials in neighbouring countries.


A ''yakitori'' char-broiled chicken store chain based in eastern Japan said suppliers of Thai chickens have requested to shorten a contract term to three months from six months because of uncertain supply prospects. ''Effects on our business are emerging gradually,'' said an official at the chain that imports Thai chickens after their processing in China.


''We expect to see no problem within this year,'' said an official at McDonald's Holdings Co. (Japan) Ltd. that imports shrimp and chickens for burgers. ''If the floods' impacts are prolonged, we may seek to receive supply from alternative sources and coordinate transportation according to daily changes.''


Many sushi-go-round restaurant chains in Japan import shrimp, squid and tuna from Thailand. ''If import prices rise on supply shortages, we may consider suspending sales of some products,'' said an official at one of these chains.

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