The value of this year's food exports is forecast to grow by 6.5 per cent to Bt855 billion, and volume by 4.5 per cent, in line with rising food prices as climate-change effects reduce global production, according to a joint statement by influential private organisations.

The Board of Trade, the Federation of Thai Industries and the National Food Institute yesterday pointed to a bright year ahead for the industry.

Export volume is predicted to expand by 4.5 per cent from 28.36 trillion tonnes last year to 29.63 trillion tonnes.

However, shipments in the current quarter will fall by 6 per cent from 8.1 trillion tonnes to 7.6 trillion tonnes, while value will grow by just 2.6 per cent year on year from Bt206 billion to Bt211 billion, because of a much-reduced supply of a number of crops, the statement said.

Pornsilp Patcharintanakul, chairman of the Board of Trade's Agricultural and Food Committee, said Thai food exports would continue to grow this year, because of natural disasters in many countries shrinking global output and resulting in higher crop prices.

Sales to Ja-pan are expected to grow significantly in the second half of the year, after the country faced a number of major disasters that destroyed many of its crops and dented economic recovery, he said.

Japan is the Kingdom's largest food export market, with shipments accounting for 15 per cent of overall export value.

National Food Institute president Petch Chinabutr said exports to Japan had grown by 18.7 per cent in the first quarter. Sales to other markets such as Australia, Malaysia, China and Indonesia also showed good growth, at 24.6 per cent, 21.8 per cent, 18.8 per cent and 6.6 per cent, respectively, because of lower domestic output following natural disasters.

This year's export projection is based on the assumption that the baht will average 30 against the US dollar.
Moreover, food prices in the global market are expected to increase by 10 per cent over the year, while the global economy is forecast to expand by 4.4 per cent.

However, Visit Limpana, chairman of the Food Processing Industry Club of the Federation of Thai Industries, said food producers faced many difficulties this year.

Higher fuel costs, a reduced supply of raw materials and an expected rise in commodity prices will increase production costs. Despite the higher export value, producers will gain less income because of the rising cost of materials, he said.

Chusak Chuenprayoth, president of KC Fresh, Thailand's leading exporter of fruits and vegetables, said exports of fresh vegetables are expected to grow by just 3.8 per cent in value terms to Bt65 billion and 6.7 per cent by volume this year, because of continuing problems concerning sales to the European Union.

The prolonged attempts by the government to resolve the issue of sanitary standards for shipments to the EU for Thai vegetables will lower export value by 4.8 per cent and volume by 6.9 per cent in the current quarter, he said.

"Thailand could miss out on Bt4 billion this year because of the lost opportunity to export vegetables to the EU," he added.

Thai Rice Exporters Association vice president Chokechai Sethiwan said rice exports are expected to drop from 2.8 million tonnes in the first quarter to 1.7 million tonnes this quarter, because of lower import demand.

The expectation that India will lift its export ban by the second half of the year will also create more difficulty for Thai exporters, as India is one of the world's major parboiled-rice suppliers.

Its higher production of rice and wheat flour will encourage New Delhi to cancel the export ban soon, he said.

Panisuan Jamnarnvej, president of the Thai Frozen Foods Association, said shrimp export volume would drop by 8.2 per cent to just 392,460 tonnes this year, because of the domestic flooding having destroyed much of the Kingdom's production.

However, export value is expected to remain unchanged from last year at Bt100 billion because of the relatively stable value of the baht.

Thai Tapioca Trade Association president Seree Denworalak said tapioca exports are expected to fall substantially this year, because of an infestation problem.

This year's cassava production is expected to come in at 20 million to 21 million tonnes. The export volume of tapioca starch is forecast to grow by 4 per cent, while value will expand by 9 per cent.

Boontham Aramsiriwat, deputy secretary-general of the Thai Feedmeal Producers Association, said the industry is expected to grow by only 2-3 per cent to about Bt200 billion this year, against an annual average of 3-4 per cent, because of the higher cost of raw materials and the fact that retail prices cannot be increased because of the government's price-freeze policy.

Source: The Nation