Thailand Food Industry 2006 - GBR

2
FOODNEWS THAILAND January, 2006

FOODNEWS THAILAND January, 2006
Thai
focus
Hungry?
Yes, Siam!
If you travel along any major boulevard
in Europe where restaurants are found,
there will be a good chance that one of
them will house Thai cuisine. The last 10
years have seen a huge increase in the
number of Thai restaurants. Even local
pubs in Britain serve Thai food.
Bordering Cambodia, Myanmar, Laos
and Malaysia, Thailand has 3 220 kilometres
of coastline and possesses an ideal topography
and climate for food growing. Blessed
with large expanses of fertile land and ideal
growing conditions Thailand enjoys the status
of being agriculturally self-sufficient,
being the only net exporter of food in Asia
and eighth biggest exporter (in terms of revenue)
of food in the world. It is the world’s
largest exporter of canned pineapple, secondlargest
seafood exporter and the world’s foremost
tapioca and rice exporter.
Thailand has 66 million inhabitants, GDP
growth of 4.8% and its exports goods and
services fuel the economy (exports accounted
for 66.3% of GDP in 2001 compared with
23% in 1984). The agricultural sector has
long been the country’s backbone, generating
food and income for Thai people. Before
the manufacturing industry began to play a
leading role in the Thai economy in the late
1970s, the agricultural sector generated
almost 100% of the country’s export income.
Thai agricultural production constitutes
Company
Page No
Champaca Co., Ltd. 17
Doi Kham Food Products Co., Ltd. 2
Exotic Food 7
Food and Drinks Public Company Limited 5
Hiwa Rotterdam Port Cold Stores 9
Itohwen & Co., Ltd. 19
JFC Enterprise Co., Ltd. 19
Malinee Food Products Co., Ltd. 9
Prunesco 15
River Kwai International Food Industry Co., Ltd. 1
Advertisers’ Index
14.12% of the country’s total exports (in
value terms) and provides employment to
some 20 million people. Conversely though,
as the level of its food exports grows, its contribution
to the gross domestic product
declines due to the rapid expansion of other
sectors of the economy. The food industry
will continue to play a crucial role in the
Thai economy because it consumes very little
foreign capital and contributes greatly to
foreign earnings.
Productivity has increased as has public
and private investment enabling the expansion
of trade in Thai produce in global markets.
It also showed its importance to the
economy as a whole in its response to the
1997 financial and economic crises. Exports
of rice, shrimp, poultry and corn all significantly
increased following the crisis.
The sector’s dynamism and importance
have prompted a high level of government
interest and participation. The Thai government
has responded swiftly over the past few
years to issues related to food safety and the
need to diversify. Thailand is ripe for agrobusiness
investment. The combination of
quality, popular and safe raw materials, the
long history and experience found in
Thailand and the ability of the food sector to
respond to global trends and needs point to
the fact that this is a country deserving of the
global food community’s attention.
Sea Value Co., Ltd. 12 & 13
Shaanxi Haisheng Fresh Fruit Juice Co., Ltd. 7
Siam Fruit Canning (1988) Co., LTD. 15
Stutzer & Co. AG Switzerland 19
Surapon Foods Public Company Limited 9
Thai Bonanza International Co. Ltd. 17
Trisun (Israel) Ltd. 7
Tuna and Fishes Limited 17
Tuna 2006 2
Viriyah Food Processing Co., Ltd. 15
Xiamen Kingstar Imp & Exp Co., Ltd. 9
Editor: Neil Murray
Chief Reporter: Kath Miller
Specialist Reporters:
Eugenie Bryan
Richard Simpson
Robert Songer
Advertisement Manager:
Vicky Drinkwater
Advertisement Assistant: Helen Davies
Market Prices: Matthew Pendered
Managing Director: Michael Hobbs
Contents
■ Set the juice loose: Thailand’s
main contribution to the world’s
portfolio of fruit juices is pineapple,
of which it is the globe’s leading
producer. However, processors are
finding it difficult to obtain the
prices they want ..............................6
■ The big fish in the sea: canned
tuna prices rise and fall according
to the quantity of the catch, but
there seems to be no slowing in
global demand................................14
■ Sweetness weakness: the soaring
price of sugar (and other key
inputs) is proving a headache for
canned fruit producers .................16
■ The seeds of doubt: Exports of
Thai canned sweet corn rose again
in 2005, and are now almost four
times higher than they were at the
start of the decade, but poor weather
has hurt production..................22
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3

FOODNEWS THAILAND January, 2006
Thai
focus
The past 20 years have seen rapid changes
and growth in the Thai food industry, especially
in the processed, value added and finished
sectors. The 1997-1998 Asian financial
crisis presented setbacks for those producers
who relied on imports and the domestic market.
However, this period also presented a
good opportunity for those with low foreign
debt, high exports and foreign currency
inflows. While their wage bill and local costs
dropped, their foreign income provided them
with healthier than usual margins. With the
focus placed on food safety and standards,
coupled with Thailand’s abundance of raw
materials from local producers (Thailand,
being the region’s only net exporter, enjoys
the capability to produce more than it can
consume) and government initiatives such
as, ‘Kitchen of the World’ the future looks
very good for Thailand’s food processors.
At the same time there is also a need for
Thailand’s food processors to import certain
food ingredients that are unavailable domestically.
The value of these imports in 2000
was estimated at around US$1.5 billion
(Agri-culture and Agri-food Canada
http://atn-riae.agr.ca/asean/e3021.htm).
Thailand itself is one of the leading food
processing nations of the world, with over
10 000 food manufacturing companies. Of
these, 96% are SMEs (small and mediumsized
enterprises) who (in the past) were
geared to serving the domestic market. With
annual exports totalling around US$10 billion,
Thailand’s world share of the global
food trade (as estimated by FAO – Food and
Agriculture Organisation in 1998) was
around 0.2%, which at the turn of the century
was estimated at US$5.5 trillion.
Thailand’s share in world food export had,
by 2001, risen (according to The National
Food Institute) to 2.28%.
Thailand itself is still home to some
colossal firms including Boonrawd Trading,
the Charoen Pokphand (CP) Group, Thai
Union and Bangkok Produce, to name a few.
However, the sales revenues of these companies
compared to some of their global colleagues
still remain as yet modest. For
instance, in 1999 the profits of Nestlé
amounted to 97 times that of the most profitable
Thai food company.
The major markets for Thai food exports
are Japan and the ASEAN countries, closely
followed by the US and EU. The Middle East
and Africa also constitute 10% of the export
markets for the Thai producers. There are
myriad reasons for this, from tariffs and
duties to GSP status and anti-dumping measures
in various sectors.
In terms of the export structure of
Thailand’s food industry in recent years, the
export statistics, commodity by commodity,
show that fisheries are a crucial component
of Thai food exports.
Thailand’s advantages
It would seem an extremely pertinent
question to ask ‘Why is Thailand the only net
Food exporter in Asia?’ Many of its south
east Asian neighbours enjoy the same climate
that makes Thailand’s claim to be the
‘food basket of Asia’ possible. All the rice
paddies in south east Asia are well suited to
the regions annual monsoons, not just those
in Thailand. One is able to grow the same
variety and multitude of tropical treats in,
say, Vietnam as one can in Thailand. The
answer is multi faceted and complex but can
be answered nonetheless.
Regional competition between all the
Asian and, more specifically, south east
Asian countries has always been fierce and
has a long and colourful history.
In terms of the food industry these tensions
and a sense of regional competition are
still keenly apparent. In terms of rice production,
Asia is responsible for nearly 90% of
global output and consumption, 50% of
imports and 72% of exports. In shrimp production
both Indonesia and Vietnam are in
the top six global producers along with
Thailand.
Importance of food safety
But there exist several factors that allow
Thailand, as opposed its neighbours, to
maintain its current exalted position in the
global food market. But also present are possible
indicators of why this may not continue
to be the case forever.
Steven Chia-Apar of Seafresh, one of the
leading groups in the Thai Food industry
explains: “One obvious advantage possessed
by Thai food companies over their Asian
counterparts is that of food safety”. This
statement, by one of the leading figures of
the Thai Food industry, highlights the one
obvious advantage possessed by Thai food
companies over their Asian counterparts:
food safety.
The government’s emphasis on food safety
is illustrated by the measures put in place
in 2003 and by making 2004 ‘Food Safety
Year’. Strategies involved the reduction of
chemical use and promotion of hygienic conditions
and looking at the improvement of
soil quality. The government’s food and drug
administration has since 2003 enforced the
law on good manufacturing practice or GMP.
In effect Thailand has utilised the principles
of GMP to raise the manufacturing standards
to international levels.
This is not a uniquely government-led initiative
though. The private sector has realised
the importance of reaching internationally
recognised safety standards to make them
attractive to overseas investors and multinational
companies and, as a rule, today the
vast majority of Thai food processing companies
are in compliance with the host of
international standards, for example HACCP,
BRC, the ISO, essentially, the ones needed to
export across the globe.
The seafood sector illustrates the attention
and focus brought upon food safety standards.
The code of conduct for food safety in
the shrimp sector was drawn up as long ago
as 1999 by five organisations: the department
of Fisheries, the Thai Frozen Foods
Association, the Thai Food Processors association
and the Aquaculture business club.
The rules and regulations that concerned
shrimp health management, waste management
and the application of drugs and chemicals
were enforced and confirm the importance
of international sanitary and phytosanitary
(SPS) standards.
That Thailand is the world’s largest
exporter of canned tuna, and competes well
in the US market with a 60% share, indicates
not only efficient production, but also a high
quality safety standard.
This emphasis on food safety increased
after 2000 when Egypt placed a ban on
canned Tuna imports from Thailand due to
the presence of genetically modified soybean
4

FOODNEWS THAILAND January, 2006
Thai
focus
oil in the cans. Thai companies showed their
flexibility by substituting sunflower oil for
the offending GM oil.
It costs roughly US$10 000 for a firm to
obtain the ISO900 safety certificate, yet,
within three years of its creation over 70% of
firms in Thailand had obtained it.
Thai tuna canning companies realised
that by attaining high quality standards, they
can differentiate themselves and their products
from their competitors and overcome
any cost disadvantage that may exist due to
tariff barriers. As with the rice industry, it is
also an admission that consumers are willing
to pay slightly higher prices for safer and
higher quality products.
However, there exists another school of
thought that suggests that the government’s
focus on the food industry has more to do
with clever marketing, as seen with the
‘Kitchen of the World’ scheme, than any
massive focus on improving food safety. Soh
Chee Yong of Ice-Cremo says. “I am glad
that the government has taken such an active
role in promoting Thai food around the
globe”. And whether one agrees with him
that their role is mainly that of a good marketing
agent or not, what is clear is that the
major comparative advantage Thailand
holds over its regional rivals is that its government
is playing such an active role.
A comparison with Vietnam illustrates
this advantage. Overall the Vietnamese food
industry is blighted by a lack of up-to-date
processing equipment, which in turn is holding
back progress.
Although in recent years the Vietnamese
government has increased the attention it
pays to its expanding food industry, it still
needs to reduce risks to food safety and to
improve quality to help the industry compete
on the world market. And this reality places
it a good few years behind Thailand.
The comparison favours Thailand, but
this advantage may not last forever. This
shows why, at present, Thailand is the preeminent
force in the Asian food sector.
continued on page 8
5

FOODNEWS THAILAND January, 2006
Fruit
juices
Set the juice
Pineapple
loose
juice – traditionally
the most expensive of
the mainstream juices –
has seen prices take a
knock of late, and Thailand
has been feeling the pinch.
BY NEIL MURRAY
It must be a frustrating time for pineapple
farmers and processors in Thailand
right now. What has always been the most
expensive ‘mainstream’ fruit juice is now
around the same price as apple juice concentrate
(AJC) thanks to startling rises in
the price of other juices.
In late summer/early autumn last year,
pineapple concentrate prices were edging
upwards. Elsewhere, prices of frozen concentrated
orange juice (FCOJ) and AJC were
heading for the stratosphere. At the time of
writing, these two juices cost around
US$1 700/tonne and US$1 000/tonne
respectively, while pineapple is around
US$1 050/ tonne, all prices c&f Europe.
The problem is that demand in the EU
appears weak at the moment. German interest
in pineapple juice is waning because of
the decline in sales of multi-fruit drinks in
the country. The Spanish, traditionally the
largest drinkers of pineapple juice, also seem
to be losing their taste for the product:
Spanish imports of pineapple concentrate for
the first three quarters of 2005 (the most
recent data available) show a fall in imports
of 19% to 13 340 tonnes from 26485 tonnes
in January-September 2004.
“They are trying hard to keep the market
at a certain level, but there is no strong
demand, so they are struggling,” said a
European trader recently, a viewpoint that
was corroborated by another buyer of
pineapple juice, who added: “The Thais are
eyeing the rest of the fruit juice market and
are trying to get some upwards price movement,
but it’s not happening.”
Looking at the figures in the table opposite
would seem to contradict this. According
to the latest trade data, Thai exports of
pineapple concentrate have risen steeply this
year, to the point where exports for January-
November 2005 are more than 20 000 tonnes
ahead of exports for the whole of 2004.
However, in October and November 2005
sales fell quite sharply, compared with the
same months last year, confirming that the
downturn has been relatively recent.
In addition, there has been a definite
swing towards not from concentrate (NFC)
juice, and Thailand is finding it hard to supply
EU (especially Spanish) demand.
“The European market has been quite
slow,” said one trader in Germany recently.
“The Spanish market, the biggest, was stable
for many years but now I hear that NFC is
increasing and this is taking share from the
Thais. Costa Rice, for example, is becoming
more important in NFC pineapple juice.”
To a degree, this is true. In 2002, Thailand
accounted for nearly half of all Spanish
imports of NFC, then running at about 4 300
tonnes annually. By 2004, the market had
grown spectacularly to just under 9 000
tonnes, but Thailand’s share fell to about
21%. Thailand has regained some market
share so far this year, but is unlikely to
account for more than 40% of a full-year
NFC market estimated by FOODNEWS to be
about 10 000 tonnes.
Indonesia has gained market share. There
is little difference in pricing between
Indonesian and Thai product, so the reason
for this is unclear, but Indonesia now has
about 10% of the Spanish NFC market.
The biggest supplier to the Spanish market,
however, remains the Netherlands and it
is possible that a lot of this juice is Thai.
Competition between newly established
processors may also keep Thai prices low.
THAILAND EXPORTS OF PINEAPPLE JUICE CONCENTRATE
200949 (tonnes) 2000 2001 2002 2003 2004 *2005
Netherlands 53 708 46 016 40 434 50 789 34 473 38 653
US 24 067 25 529 23 034 23 550 16 106 20 911
Spain 13 023 9 935 6 248 8 874 5 704 9 728
Japan 1 515 2 401 2 177 3 196 3 877 6 290
Italy n/a 1 691 2 270 5 393 5 033 6 055
UK n/a 675 331 854 914 2 017
Canada 1 673 1 916 2 458 1 608 1 136 1 810
Russia n/a 344 1 580 1 443 1 430 1 784
Israel 2 487 1 414 3 026 2 250 2 749 1 452
Belgium n/a 308 177 93 21 1 021
South Korea 528 924 1 010 997 1 020 729
Australia 2 262 2 662 3 193 3 573 1 000 662
Saudi Arabia n/a 437 252 305 – 595
Chile 638 1 138 959 641 – 501
France 1 270 603 119 59 3 845 443
Lebanon 713 614 1 589 1 353 – 403
Puerto Rico 1 420 316 94 95 – 336
Taiwan n/a 262 388 213 – 266
Germany 1 017 1 121 132 282 6 197 215
Finland n/a 820 378 467 865 189
Singapore n/a 94 123 128 129 122
Hong Kong n/a 95 55 110 – 81
Mexico n/a – – 353 – 0
Others 10 694 5 996 5 834 5 725 2081 6 399
Total 115 015 105 311 95 861 112 351 81 599 100 662
*January-November Source: Department of Business Economics, Department of Customs, GTIS
6

FOODNEWS THAILAND January, 2006
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7

FOODNEWS THAILAND January, 2006
Thai
focus
continued from page 5
If proof were needed that Thailand is
refusing to rest on its laurels, look no further
than some of the organisations that reflect
on, advise and control the industry. They are
evidence of planning and strategy, and given
that they have cut their teeth on years of trouble
with economic restrictions, regulations,
safety issues, and viruses they have evolved
into some of the most dynamic organisations
across the board. The National Food
Institute, the Kitchen of the World and the
Thai Frozen Foods Association are three of
the most energetic. The former covers the
industry as a whole, and the latter has
evolved from covering one of the most significant
Thai exports – seafood, to covering a
range of frozen products. Run by Panithan
Vajaranant and Poj Aramwattananont respectively,
they are evidence that an industry of
this size and of this potential needs structure
and planning to realize its potential.
National Food Institute – Interview
with Panithan Vajaranant:
What were the reasons behind the establishment
of the NFI?
Actually it started as a private sector initiative
around nine years ago. Many of the
bigger companies involved in production and
export were having difficulties with regula-
Surapon Vongvadhanaroj of Surapon Foods
tions. Some felt that the government arm was
too slow to work with them in terms of action
and reaction. Subsequently, some of the bigger
players proposed to the government that
we needed an organisation that would help
watch over the food industry. The biggest
challenge and the priority back then was the
safety system. That was nine years ago. If we
were to be serious about the success of our
food industry, we were going to need someone
to look into these issues full-time.
How important is food safety to Thailand’s
food industry?
It is quite clear that if Thailand wants to
be competitive then we have to put food safety
first. We started initially with the export
segment. Somebody asked, “Well what about
the domestic?” But we realized that we could
not do everything at the same time. So we
began with the export. We can proudly say
we are the only organization who has been
sticking with this role since the beginning.
How would you define your role?
We have four missions. The first one is
food safety, the second one is research and
development, the third one is information
and information systems and the fourth one
is business development. If you look at these
four missions, they present a huge task. I
think I can say that this government is the
first government that has tried to put this
strategy into action, tried to make it happen.
A lot is down to deputy prime minister
Somkid. He is also very involved with the
NFI and how we can achieve our objectives.
The key will be in the planning and the
strategy. We have a strategy. With regards to
food safety, even though we began with
exports, we have since moved onto domestic
issues. An initiative in 2002 with the Public
Health Ministry set about helping food producers
obtain their GMP. There is no reason
that the standards for food consumed in
Thailand should be any less than those outside
of Thailand.
This is something that our prime minister
is very keen on: every chance he has he
emphasises that food safety is the priority
and it needs to be applied domestically as
well as internationally. Thai people deserve
the same standards as everyone else.
How successful have these initiatives been?
“
Of course, bird flu was a very painful and worrying time for
us all, but it has given us an opportunity to make a lot of
changes.The farmers’ attitude has been one of humility.
”
Panithan Vajaranant, Executive Director of the
National Food Institute
That was two years ago, and I would say
that now the government, including the NFI,
has the commitment to bring the standard up
to the international level. You can see for
yourself the food stalls in the street: which
ones do you trust?
How are today’s challenges being overcome?
Well, last year for instance, bird flu hit
Thailand. But on the bright side, I suppose
you could say there was a degree of good
timing for the country. The government
began to use a lot of advertising and campaigns
to try and change the attitudes of people,
not only the people in the street, but also
the people in the farms.
Of course this was a very painful and
worrying time for us all, but it has given us
an opportunity to carry out a lot of changes.
The attitude of the farmers has been one of
humility, to the extent that they are now asking,
“What can we do? How can we
improve? Just let us know”. This attitude is
totally different from before, where we were
asking if not begging them to do this or that.
At what point in the food chain does the
responsibility of the NFI lie?
It really is across the board, from farming
to the point of sale, but our true focus has to
lie in the middle of the chain. The processing,
that is where we operate and is where
our priorities lie.
We are expanding to cover the beginning
of the supply chain, we believe in the market
and we are striving to understand what we
need to do in order to fill any gaps. We are
very pro-active.
To be competitive now, you need to be
very assertive.
continued on page 10
8

January, 2006
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9

FOODNEWS THAILAND January, 2006
Thai
focus
continued from page 8
To those looking to do business in or with
Thailand, I would say that Thailand is very
easy compared to the rest of the world. Thai
people are very open-minded. The way we
do business is very different to the west; even
within Asia it is different. I would say
Thailand is very understanding and easy to
understand. We try to understand people and
everyone who is doing business with us. We
have learnt a lot about people’s requirements
(in and from this industry) and we are
focused on providing the world with the best
products. We want to be assertive without
being aggressive.
Interview with Poj Aramwattananont,
President of the Thai Frozen Food
Association and frozen seafood guru.
Could you explain the evolution of the
TFFA?
The Thai Frozen Foods Association is a
private non-profit organization. We were
founded in 1968. The Association began life
as the Thai Marine Association. In 1983 we
evolved into the “Thai fishery and Frozen
Products Association” reflecting the fact that
we also covered the frozen products industry.
The current name however was adopted 11
years later. The Thai Frozen Foods
Poj Aramwattananont, president of the Thai
Frozen Foods Association and industry guru
10
In Season Foods: High technology and skill in Thailand
Association reflects our blanketing of frozen
products and it also extends the
Association’s supervision from just marine
products to cover other food types too.
Specifically what are the aims of TFFA?
The objectives of TFFA are based around
the promotion of entrepreneurship of all
frozen foods in Thailand. This includes
informing and supporting our members
through any business hurdles that may be
placed in their paths. This also includes
mediation, conflict resolution and information
transfer between two or more of our
members. We aim to promote both in qualitative
and quantitative terms the fishery and
agriculture industries, in response to domestic
and international demand. We compile,
collate and share our data to produce statistics,
which benefit our members. And of
course we cooperate and collaborate with the
government and its relevant departments
whilst retaining a neutral stance, politically.
What activities are undertaken to assure
these objectives are met?
The TFFA has set up 3 sub-committees;
take the Export Problems Solving
Committee, for instance. It was established
11 years ago to deal with the problems
exporters were facing at that time. Back then,
there were continuing rejections coming
from some major markets. These problems
intensified to the point that there was a total
ban on imports into Italy several times. We
firmly believe that prevention is better than a
“
The higher tariff made it very difficult for Thai shrimp to
stay competitive in the EU and US markets. In the first quarter,Thai
shrimp exports to the US were down by 43%.
”
cure. This is why we meet every two months
to share information, news and problems
among representatives. We conduct seminars
that allow us to share our views, which can
assist the whole industry. There is a good
feeling of camaraderie among us all.
The Data and Information Committee
was established in 1993. The TFFA advises
its members about the prices of fishery products
etc.
The NASEG Committee or North
America Shrimp Exporters Group was born
out of a club of several TFFA members
called The Shrimp Club. Upon seeing the
necessity of unity in negotiation they formed,
‘The North America Shrimp Exporters
Group’ or NASEG”. NASEG negotiates the
cost with freightliners enabling its members
to achieve lower costs than non-members.
NASEG has over 90 members.
Regarding Anti-Dumping measures?
With the higher tariff, it became very difficult
for Thai shrimp to stay competitive in
the EU and US markets. In the first quarter
Thai shrimp imports to the US have been
pulled down by 43% year on year and overall
Thai shrimp exports have fallen by 36%.
A lot depended on the US ruling.
With regards to GSP, a lower GSP would
provide good export opportunities for
Thailand’s shrimp in the European markets.
You, yourself clearly have faith in the industry
with your recent US$20 million investment
in the new facility and Sea Value?
Sea Value was formed in March 2004 as a
holding company for two of the leading Tuna
processors, namely Unicord PLC and ISA
Value.
Unicord itself has over 20 years of history;
it was founded in 1978 as Unicord

FOODNEWS THAILAND January, 2006
Thai
focus
Investment and changed to Unicord in 1984.
Unicord produces mainly canned food,
pouch packs and frozen products, Human
food, pet food and value added food respectively.
ISA Value also has many years of experience
and is today producing 500 tonnes of
tuna under strict quality guidelines.
With the experience of the people
involved in this project and the technology
involved, this will become one of the largest,
most advanced tuna operations in the world.
Kitchen of the World
Thailand’s abundance of food products and
climate ranges, combined with the reputation
of Thailand as a net exporter of foods, has
meant that the promotion of Thailand as a
business partner and of Thai products overseas
has been essential. With this aim in
mind, the Department of Agriculture, under
the Ministry of Agriculture and Cooperatives
spent 2003 outlining methods by which the
export or fruit and vegetables as well as the
processing of food could be made healthier
and safer. Particular efforts were made in the
reduction of chemical usage and the development
of soil quality.
This aim was merely one method of the
multi-pronged assault on the world food
markets made by the government. Yet perhaps
one of the most ambitious tactics is the
Kitchen of the World campaign.
The Kitchen of the World is essentially
aimed at increasing the number of Thai
restaurants overseas. The reasons behind this
are that first, Thailand’s place on the food
map will be reinforced. The consumption of
Thai food will increase awareness of
Thailand as a food processing nation and
would ideally encourage business to and
from Thailand. An increased number of
restaurants will provide a distribution network
for Thailand’s food processors to be
able to sell their products overseas. Finally,
any interest in Thai cuisine will surely
increase interest in the finished Thai-style
products that are being manufactured in
increasing quantities in Thailand.
As several members of the Kitchen of the
World and NFI team believe, “We think that
food is one of our crowns. We want to export
to the world, we have a unique product, and
Thai food is already very popular across the
world. This is our niche, if we can promote
Thai food it means that we can increase the
number of Thai restaurants overseas which
means that we can increase exports of products,
specifically ready to eat and ready to
cook. Moreover, we can also export personnel,
Thai chefs for instance.”
“The Kitchen of the World initiative
began in 2003. It was an initiative of Prime
Minister Thaksin himself. He realised that
Thai cuisine is very popular, and has a great
potential for export, and so he managed to
get funding for this project.
“He is explicit when it comes to expressing
Thailand’s skill as a food producer and
exporter. We are the top exporters of many
products, pineapple for instance. In terms of
the technology, the know-how and the experience
we truly excel.”
For Thailand to truly thrive as Kitchen of
the World, it will take more than premium
finished products, or an abundance of exotic
raw materials. The kind of challenges that
Thailand is up against include meeting
hygiene standards, non-tariff barriers, raw
material shortages in certain sectors and epidemics
such as the aforementioned AI.
From the thoroughness of the National
Food Institute to the camaraderie and ambition
of the Thai Frozen Foods Association
and its President, along with hopes within
the poultry industry, it would appear that the
future is bright for Thailand, its exporters
and its consumers. One remaining anxiety is
the fact that, although in the last decade or
so, revenue gained from the export of
processed materials has doubled, the farmers
of Thailand still seem to be living in relative
poverty. The focus on manufacturing needs
to be shared with the farmers, as it is crucial
that Thailand and its food industry realize
that without raw materials, there is no processing.
Where from here?
For all the praise due to the Thai food industry
and its government’s keen participation in
it, it remains clear that with the development
of the Chinese and Vietnamese food industries,
the Thais cannot rest on their laurels
and further developments need to be made.
But resting on their laurels does not seem to
be on the menu. The presence of innovative
companies, favourable global trends and the
development of existing recipes indicate that
the industry is doing its utmost to remain the
‘food basket of Asia’.
Thailand is famed for being the world’s
leading exporter of a host of products, rice
and canned pineapple to name but two. Yet it
is also home to several little known but innovative
companies that illustrate the breadth
Vilai Kiatsrichart, president of the Thai Food
Processors Association
of products the country has to offer and the
ability of the industry to use its plentiful supply
of quality raw materials to create something
new and exciting. Developments like
this hint at a positive future for Thai companies
in the arena of ‘niche’ food products.
One such company is In-Season Foods. It
has taken one of Thailand’s most abundant
and popular raw materials, tropical fruits
such as pineapples, lychees and mangos, and
treated them in a way that ensures all the
goodness and taste remains whether it is
eaten two days after being picked or two
weeks.
Its innovative methods ensure that
Europeans are not denied the same luxury as
Asians in eating truly delectable fresh fruit.
Once picked, the fruits are taken to In-
Season Food’s state of the art factory and on
the same day they are cryogenically frozen
using liquid nitrogen to produce individually
quick frozen (IFQ) fruit. The company is the
only one of its kind in Asia and already in its
short life has created much excitement and
disbelief over the quality of the product.
“Due to the nature of the project and idea
only a ‘back of the envelope’ type of feasibility
was possible. However the concept was
developed on strong business principles”
said Asraf Fancy, who owns and runs the
company with his son Ali Fancy.
The company is indeed built on strong
business principles but also two other important
ingredients – innovation and vision.
continued on page 20
11

FOODNEWS THAILAND January, 2006
Canned
fish
The big fish
Tuna
in the sea
catches have been
erratic over the last year,
but with exports up and a
free trade agreement with
the US in the works, there
is no sign of sales slowing.
BY RICHARD SIMPSON
THE Hollywood screenwriter William
Goldman once famously remarked
that in the film industry “no-one knows
anything really”, but this maxim could
almost as easily be applied to the tuna
business, with catch levels and fish prices
proving almost impossible to predict.
The last two year’s have seen both dramatic
fluctuations in price for raw fish and in
tuna supply, with last year’s tsunami casting
a distinctly dark shadow despite only peripherally
affecting the industry.
Prices for raw material hit an all time high
in September 2004 of US$1 180/tonne in
Bangkok, heart of the tuna business, but
2005 saw prices vary from US$700/tonne
(towards the beginning and end of the year)
to as much as US$1 030/tonne in August. On
the whole, prices for the year averaged out at
around US$900/tonne, an awkward price for
processors to deal with as one told FOOD-
NEWS back in 2005: “At around
US$900/tonne it is very expensive for us
buyers, especially when we look back at the
prices we have had before of around
US$600/tonne. However, we are all conscious
of the fact prices could so easily go up
and then we really feel the squeeze.”
One of the major issues for the Thai tuna
industry in 2006 will be the ongoing negotiations
between the US and Thailand aimed at
finalising a bilateral free trade agreement.
Discussions between the two countries began
back in January 2004 and are still on schedule
to be completed by June 2006.
THAI EXPORTS OF CANNED TUNA (January-December)
160414 (tonnes) 2000 2001 2002 2003 2004 2005*
US 70 564 71 497 73 634 108 085 98 472 103 591
Australia 19 283 20 015 23 683 28 606 29 850 29 333
Japan 21 586 19 788 23 496 24 114 28 910 26 251
Canada 23 711 24 089 25 523 25 303 25 381 25 873
Egypt 27 419 29 687 21 216 23 001 19 300 22 789
Libya 1 258 1 698 9 540 14 233 18 290 22 743
Germany 4 275 10 373 10 406 9 661 6 061 15 462
UK 13 460 17 196 17 248 18 123 13 174 15 432
Saudi Arabia 6 118 12 433 12 408 11 834 15 347 13 795
Israel 4 876 7 286 7 635 10 255 7 779 8 256
Argentina 7 448 9 330 378 6 643 8 941 7 537
Switzerland 3 093 3 192 2 965 6 296 5 070 5 880
South Africa 2 447 2 886 2 759 4 925 5 268 5 833
Others 60 190 69 120 89 378 104 641 95 675 111 775
Total 265 728 298 590 320 269 395 720 377 518 414 541
*2005 exports are up until until the end of November
Source: GTIS
Tuna talks
At five-day talks in the northern Thai city of
Chiang Mai in early January 2005, Prime
Minister Thaksin Shinawatra, said in an
address to local and foreign business leaders,
“On the Thai-US FTA, if we don’t trade with
the US, we will lose. Right now, our greatest
surplus with any country is with the US. We
will be at a huge disadvantage to others if we
lose our access to the US market, as other
countries will pursue their own deals. We
need to move now, before we have no more
room to move.”
A report by the Thailand Development
and Research Institute, a Bangkok-based
think-tank, estimates that, in respect to agriculture,
the US and Thailand would both
enjoy big economic gains from an FTA.
According to their analysis, agricultural
exports to the US would increase by 5-22%,
while US exports would also increase by 4-
67%. The gains for Thailand’s agricultural
sector would result in a 2.3% increase in
gross domestic product, says to the report.
The US has agreed to end tariffs on 74%
of all Thai imports totalling US$1.28 billion
(THB51 billion) immediately after the FTA’s
implementation, increasing to 85% and
US$1.46 billion in five years. The items covered
will reach 97% in 10 years totalling
US$1.60 billion and will include canned tuna
and processed fruit.“If the US comes with a
lower duty for Thai tuna with no strings
attached, it will certainly help,” said one
major Thai trader.
“But as usual with these things, strings
are always attached somewhere. What we
really need is for EU to drop their duties so
Thailand is not at any disadvantage and
everybody is on a level playing field, and this
applies not only to tuna but also to canned
pineapple and canned sweet corn.”
Nevertheless, Thai exports of canned tuna
are at their highest levels in history, hitting
414 540 tonnes by the end of December
2005, compared with full year sales of
377 520 tonnes in 2004 and 395 720 tonnes
in 2003 respectively.
The US has once again boosted its intake
of Thai tuna to over 100 000 tonnes, after a
slight sales slump in 2004.
The subject of mercury in canned fish,
has sporadically reared its head in the US
through media reports, but this scare seems
to have had little effect on the country’s tuna
needs. With one month to go in 2005, Thai
exports look set to surpass the 430 000
tonnes mark, even though December is usually
a fairly quiet period, being a a holiday
period for countries.
14

FOODNEWS THAILAND January, 2006
15

FOODNEWS THAILAND January, 2006
Canned
fruits
Sweetness,
weakness
Sugar and labour issues
have been putting Thai
processors under pressure,
but with supply and sales
rising, optimism is returning
to the industry.
BY RICHARD SIMPSON
SUGAR is proving to be an extremely
trying issue for Thai pineapple canners
as fears of a shortage in the country, which
is the world’s third largest exporter of the
product, has left the canned industry with
a distinctly sour taste in its mouth.
Overall costs have gone up substantially
over the past year, as they have in general for
canned foods, with fuel, labour and tin-plate
all increasing in price.
The Thai government is closely monitoring
the production cost of sugar at present
before deciding whether to remove it from
the list of price-controlled goods, to prevent
a shortage to the domestic market.
Pineapple canners in particular will have
been alarmed by recent calls by the Thai
Sugar Miller Corporation, one of the country’s
biggest sugar companies, to float sugar
prices and regulate the amount canners take.
“Supply might be tight if the government
cannot fix loopholes on sugar smuggling and
the amount bought by major sugar consumers
such as canned fruit producers,” said
Thai Sugar Miller president Vibul Panitvong,
quoted in the Business Times.
A shortage of skilled labour has also been
an issue for processors, and came to a head
back in November 2005 when canners struggled
to catch up on a backlog of orders, due
partly to the delay in the start of the packing
period.
Factories were only running at about 80%
of their capacity, due to the lack of labour but
in the end canners were able to push on and
ensure enough fruit was available coming
THAI EXPORTS OF CANNED PINEAPPLE (January-December)
200820 (tonnes) 2000 2001 2002 2003 2004 2005*
US 85 245 81 659 84 283 103 399 116 965 118 848
Russia 920 8 825 8 525 10 102 17 952 33 803
Netherlands 33 555 26 704 19 987 27 716 37 508 33 188
Germany 59 600 58 701 47 314 53 813 45 978 31 828
Japan 32 152 33 708 28 796 26 009 29 518 29 289
Canada 18 926 21 280 21 857 22 393 22 485 20 516
UK 17 503 15 432 13 975 15 706 18 394 15 275
Poland 3 099 7 994 8 296 13 129 12 871 12 349
Saudi Arabia 6 133 9 670 7 631 8 807 8 558 11 780
France 17 039 16 705 14 201 15 906 14 716 11 624
Italy 11 962 7 800 7 410 11 427 11 938 9 463
Spain 12 261 10 488 9 499 12 375 11 696 8 542
Australia 10 463 8 825 4 726 5 229 5 039 7 393
Taiwan 7 690 6 336 6 592 6 043 7 066 7 389
Yemen 3 243 4 714 5 141 6 945 6 274 6 608
UAE 1 152 1 802 2 927 3 435 3 994 5 603
South Korea 2 153 1 966 3 701 3 375 6 365 5 404
Finland 7 995 8 306 4 295 7 079 6 438 5 369
Sweden 6 259 6 474 4 915 6 762 6 296 5 341
Romania 3 668 4 115 2 672 4 216 3 511 5 164
Pakistan 2 410 2 278 2 794 4 370 3 265 4 931
Denmark 3 583 4 420 4 270 4 913 4 671 4 599
Belgium 9 401 8 935 6 881 10 425 6 812 4 543
Others 71 770 61 585 64 171 91 687 69 770 63 784
Total 428 182 418 722 384 859 475 261 478 080 462 633
*Statistics accurate up to November Source: GTIS
into 2006.
One trader told FOODNEWS at the time:
“Labour is a major problem for many Thai
industries and the canning industry is no
exception. Packers are not able to reap the
full advantages of the crop because it is proving
almost impossible to get the workforce. It
is frustrating.”
On the production side of things though,
Thailand is in an extremely healthy position
heading towards the summer crop in
March/April, despite heavy rainfall, leaving
Thai pineapple farmers struggling to harvest
the country’s winter crop back in September,
and making raw material scarce and few
offers for canned fruit.
Better availability
Better fruit availability has reflected in the
current fairly low raw material price of
THB3.00/kg, as of 16 January 2006, a big
drop on early-October’s price of THB4.50-
5.50/kg, and packers are comfortable enough
not to have to fight over produce.
The wet weather was in stark contrast to
the severe drought that hit Thailand’s growing
areas at the start of the year, and led to
substantial fruit loss (FOODNEWS passim).
Thai canners are now confident that the
winter crop can make up for the summer
shortfall, although the disappointing summer
crop was a blow.
“The winter crop has almost compensated
for the shortage in produce from the summer
and Thailand is expected to meet the 1.85
million tonnes of pineapple forecast to be
produced this year. The problem is that we
really needed the summer crop for the EU
summer sales, so availability is not as important
now, “ said one major Thai processor.
The Thai canned pineapple industry, like
their counterparts in sweet corn, will be
crossing their fingers that the weather is
kinder this year than last.
16

FOODNEWS THAILAND January, 2006
2006 Media Information
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17

FOODNEWS THAILAND January, 2006
ITOH
ITOHWEN AND COMPANY, LIMITED
We are the Producer and Exporter with our own facilities and equipment in China of the following:
FROZEN PRODUCT:
Boletus Edulis, Nameko, Pleurotus, Shiitake, Morel, Cantharellus Cibarius, Champignons, Suillus Granulatus, Black Fungus, Strawberry
(whole/cube), Peach, Pear, Apricot, Blueberry, Blackberry, Blackcurrant, Lingonberry, Raspberry, Lychee, Asparagus, Garlic.
BRINED PRODUCT:
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Terreum, Garlic.
DRIED AND OTHER PRODUCT:
Boletus Edulis, Champignons, Pleurotus, Shiitake, Morel, Cantharellus Cibarius, Black Fungus (black/black or black/white), Strawmushroom,
Apple Dice, Apple Ring, Garlic, Safflower, Hibiscus Flower, Concentration of Apple/Pineapple/Passion Fruit.
Head Office:
Branch Office:
Flat A, 16/F., Catic Plaza, 8 Causeway Road, Room 3202, Block C,
Causeway Bay, Hong Kong
Bao Hai Gao Ji Gong Yu, Guan Shang Bei Lu,
E-mail: itohwen@netvigator.com
Kunming, China
Website: http://www.itohwen.com Tel: (86) 1370 8840558
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Bilingual Review published
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FOODNEWS THAILAND January, 2006
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19

FOODNEWS THAILAND January, 2006
Thai
focus
continued from page 11
Another such company is Ice-Cremo. It
has seen a gap in the ice cream market that it
intends to fill using, like In-Season foods, the
very thing that makes Thailand an attractive
proposition for foreign investors in the first
place – its abundance of quality raw materials.
Realising that it could not compete in the
global market by producing the well-known
flavours we all love to eat, such as chocolate
and vanilla, it hopes to create a name for
itself by producing distinctive ‘Thai
flavours’. Such weird and wonderful flavours
as jackfruit and mangosteen may seem
strange, but have already achieved success
and once more illustrates the variety of products
on offer in Thailand.
Excellence can be found in every corner
of this industry. The shelves of the Food and
Drinks Company are filled with brands
instantly recognisable in any number of
European and American (not to mention
Australian and Japanese) retailers. As Huai
Hui Lee of Food and Drinks says, “People
need to know exactly what we are capable of
in Thailand. We can produce absolutely anything,
to the specifics and standards of the
customer”. She goes on to add, “We want to
make every product delicious, and with a
good quality, and it’s not only a mission for
Kuang Pei San, with distinctive Smiling Fish logo
me, but for any Thai company. We, here in
Thailand are developing together so that the
industry as a whole can proceed. In sales, yes
we may compete. But when it comes to technology
and know-how, everybody should
help out so that we can continually increase
the quality of the whole industry.”
And success is not only the responsibility
nor the luxury of the established older companies
such as Food and Drinks. Even newcomers
such as Viriyah have injected their
own adrenalin into the industry. As producers
of corn and awaiting its second birthday,
Viriyah is more than a “new kid on the
block”. Its managing director, Apichat
Suttisiltum was adamant (as were his colleagues)
that quality and safety were essential
to success. However he differed over one
issue.
Whereas his colleagues in canning and
vegetable production believed that the only
hurdle in achieving higher quality was the
quality of the raw material, Apichat was
clear: “Of course a higher quality raw material
will give a better quality of finished
product, but we believe that skill in production,
especially in our field is of similar
importance. We have the processing knowhow
and expertise, which allows us to take a
product and ensure that it is processed to the
very highest standards available. Of course,
everyone needs to be using the best raw
materials, but we can go one step further.”
High technology
High technology and know how are in abundance
in Thailand, but the feeling across
many of the processors is one of camaraderie.
Doi Kham, for instance, is a company
born out of the Royal Project, an initiative
of the King himself, initially to help the
farmers in the north. Today Doi Kham goes
from strength to strength with a new line of
tomato juices. Mrs Mayoree, the President,
knows that a fair price and fair treatment of
farmers will always be respected, not only
within the industry but also by the consumer.
Of greater importance though to the
future of the Thai food exports is the
favourable development concerning the huge
income generator, shrimp. The last few years
have been a gloomy period for Thai shrimp
“
People need to know exactly what we are capable of in
Thailand. We can produce absolutely anything, to the specifics
and standards of the customer, whatever it may be.
”
companies. Faced with export hurdles, not
only in the EU but also the US, it has had to
endure very difficult times in competing in
these two high shrimp consumption markets.
For years Thailand has urged the EU to reinstate
tariff privileges for shrimp under its
Generalised System of Preferences (GSP) to
boost the competitive edge of Thai shrimp
products. And success has been achieved.
This year sees the return of the GSP meaning
that the tariff on Thai frozen shrimp will be
reduced to 4.2%, down from 12%, and 7%,
down from 20%, for processed shrimp.
Steven Chia-Apar still has good hopes for
his industry: “There is clearly light at the end
of this tunnel,” he says. That the future can
be considered bright for Thai shrimp is further
highlighted when set against the background
of increasing exports of the previous
two years. 2005 saw 430 000 tonnes of
shrimp exported from Thailand. This was up
from the 360 000 tonnes exported in 2004.
Over the next three years it is hoped that the
volume increases to 600 000 tonnes. With
this favourable change in European attitudes,
many Thai shrimp companies are focusing
much of their attention on the European market.
Anti-dumping measures
Although the anti-dumping measures against
Thai shrimp in the US remain, this in spite of
US statements saying they would seriously
look at removing them in the wake of 2004’s
tsunami, the outlook is not as bleak as some
may think. Last year saw exports of Thai
shrimp to the US increased to 111 000
tonnes, a surprising rise of 32.5%. During
the same period China, which used to be the
second major exporter to the US, has witnessed
its exports decrease by 29 %. This
combined with the fact that the Japanese
market is opening up once more after the
country’s decade long recession and Thai
shrimp companies and by extension the
whole food industry have every reason to be
optimistic.
One effect of the tariffs illustrates another
trend seemingly being felt throughout the
Thai food sector. When questioned about the
consequences of the damaging EU and US
tariffs Chia-Apar said that many smaller
operators had gone out of business. This has
had the effect of streamlining the industry.
There now exist fewer players but these tend
to be large in size and capable of exporting in
greater volume. Therefore, increased competition
on the global market is also replicated
20

FOODNEWS THAILAND January, 2006
Thai
focus
on a smaller scale within Thailand.
Thailand’s fixation with Free Trade
Agreements (FTA) has also contributed to
the trend of smaller producers and exporters
worrying about their future while the larger
players have been able to take advantage and
grow. For example, while big names such as
the CP Group can benefit from zero tariff
imports to China, this is not the case with all
exporters. At the same time as the CP Group
export revenue of fruits nearly doubled in
2005 from THB100 million in 2004, due to
FTA deals with China and Australia, smaller
producers have not increased their share by
nearly as much, due to the US$2 000 inspection
cost per shipment that remains in place.
Therefore, it is likely, although not certain,
that the Thai Food sector will be dominated
and driven by large companies such as
the CP Group and Seafresh and not as used
to be the case by the plethora of small to
medium sized operations. If the smaller players
are to gain footholds in foreign markets
then they will need foreign partners more
than ever.
The presence of tariffs on food products is
commonplace throughout the world, and
with regard to Thailand are not limited to its
shrimp industry. Its pineapples are also subject
to anti-dumping measures in the US, and
this has forced the pineapple processing
industry to seek out other markets or find a
US partner. This move, although hardly revolutionary,
is a microcosm of the whole food
processing industry in Thailand.
Whilst always looking to extend its
advantages in the large markets such as the
US, EU and its Asian neighbours, many Thai
companies are looking to the emerging food
markets to export to. This is no different
where canned pineapple companies are concerned.
Russia is one of the fastest-growing
markets for canned pineapple and Thai companies
have been quick to latch onto this
growth market. The first quarter of 2005 saw
Thailand export 622 900, compared with just
166 500 in 2003.
The great advantage of Thai companies is
their experience and acknowledged focus on
safety, hence they are able to tap into new
markets much more easily than their opponents.
In being such huge exporters of many
products, Thai companies are able to seek
out these new growth markets quicker and
better than their rivals. If the industry as a
whole is to expand as the government
intends, then one should expect to see further
penetration into new growth markets such as
Russia and China.
Whilst we wait to see if the changes articulated
above materialise across the board,
one motor of change that is set to continue is
the recent growth of ready-to-eat products
and Thai sauce companies.
The growth in popularity of Thai food
around the globe will not necessarily lead to
a growth in sales of, for example, Thai
canned pineapple or Thai shrimp. The
emerging emphasis within the industry on
ready-to-eat Thai meals and Thai sauces is a
tacit acknowledgement of this fact.
Ready to eat Thai meals and Thai sauces
are capable of riding the wave of popularity
that exists concerning Thai cuisine. As
Surapon Vongvadhanaroj of Surapon Foods
knows all too well, “you cannot ignore the
growing importance of ready to eat produce”.
He is not alone in this view. Indeed, if one
was to write a history on the vast majority of
Thai sauce companies it would not amount to
much. This is because so many of them have
only recently been established. Jittaporn
Jantarich of Exotic Foods, when studying in
the US, really wanted a homemade Thai
meal, but upon venturing to his local supermarket
found he was not able to buy any
authentic Thai sauces. Now several years
later he is at the forefront of a burgeoning
industry aiming to ensure that others in foreign
supermarkets do not have the same
struggle he experienced.
Foreign palette adjustment
Already the receptiveness of foreign palates
to authentic Thai meals and sauces is being
seen beyond the host of Thai restaurants.
Exports to Europe are increasing year by
year and this trend shows no sign of abating.
Add to this the effect of ‘Thai Kitchen of the
World’ and one can see why the Thai food
processors association deemed it necessary
to create a new grouping, that of ready to eat
processors. This clearly illustrates that the
future of Thai food is to be found in this new
exciting sector.
One other great change that needs to
occur, and which ‘Thai Kitchen of the
World’ is testament to, is that the industry as
a whole needs to market itself much better.
As Surapon Vongvadhanaroj said: “There
was a time when Thai food companies would
not market themselves at all; they would simply
wait for buyers to find them.” This growing
realisation, although government-led, has
permeated down through the industry on two
levels. Firstly, the keenness of Thai companies
to travel to international trade fairs has
risen over the past five years – the annual
Thaifex Food Exhibition, run by the Thai
Department of Export Promotion has seen a
year on year increase in the number of companies
wanting to show-off their products to
the international food community. 2005’s
show saw 866 companies present at the fair
compared with 738 the year before. And secondly,
the ability to appreciate that in emphasising
their ‘Thai heritage’ producers can
better ride the wave created by Thai cuisine’s
global popularity. The past few years have
seen an explosion of companies using the
‘Thai’ motif on their packaging. Faced by a
seemingly perpetual series of setbacks,
Thailand not only remains one of the most
reliable food processing nations, but is also
beginning to reach out on its own. The days
of Thai firms sitting and waiting for business
to land on the doorstep are gone. With firms
like Champaca facilitating trade between
company and company and nation and
nation, problems such as language barrier,
price discrepancies, and quality disputes are
all but eradicated. If further proof were needed
of Thailand’s food processors’ ambition
then simply consider their increased presence
at ANUGA, or any other international
trade fair for that matter.
For those naysayers who believe that
Thailand is destined to serve as an OEM producer
for overseas firms, rather than producing
its own international brands, they merely
need consider the Thai Kitchen of the World
project.
If they still needed convincing, then the
rise and rise of Red Bull makes it clear that a
country that for decades has excelled in
farming, manufacturing and processing, is
now beginning to excel at marketing too.
It is fitting that the national animal of
Thailand is the elephant, because it seems
that its strength and scale is more than a
match for any obstacle in its path.
It is likely that Thai Food exports will be dominated by big
companies like Seafresh. If smaller players are to gain footholds
in foreign markets they will need foreign partners.
“
”
21

FOODNEWS THAILAND January, 2006
Canned
vegetables
The seeds
of doubt
Sweet corn is one of
Thailand’s dependable
crops, but chaotic weather
in 2005 hurt production and
left the industry limping
towards the new harvest.
BY RICHARD SIMPSON
THAILAND has faced one of its most
stressful periods in its history in 2005,
as far as canned sweet corn is concerned,
with drought affecting the summer crop
and heavy floods afflicting winter’s.
Thailand’s problems stretch back to the
start of this year, when more than 66
provinces were troubled by arid weather conditions,
estimated to have damaged around
13.7 million rai (2.2 million hectares) of
agricultural land and cost the Thai economy
over THB5.5 billion (US$139.6 million).
“Canned sweet corn will continue to be a
major headache this year,” one leading Thai
trader told FOODNEWS. “This is because
during the last season’s floods, seed companies
also found their fields flooded.
Therefore the output of seeds needed to sow
the sweet corn fields from these companies is
also going through shortages. They have also
raised the price of seeds by as much as 10%.
Together with this and all the higher costs
accumulating in 2005 with fuel and steel
prices rising, Thai packers have no choice
but to force higher selling prices into the
market place. However, they are receiving
positive feedback right now.”
“The crop should start coming out again
in January and more from February onwards,
but supply will certainly not be as high this
year and prices will be higher,” he added.
Sweet corn is usually one of Thailand’s
most reliable crops as, unlike pineapple, it
grows all year round and has ensured
Thailand has flown past traditional European
producers like France, Hungary and the US,
leaving many competitors heavily bruised
due to Thailand’s traditionally cheaper
prices, what Thai traders have insisted is
“their natural advantage”.
Thai shortfall
Europe’s production is mainly sold to its
internal markets. However, due to the recent
shortages of raw material in Thailand, rival
processors have found themselves in a
stronger position and been able to effectively
compete and even offer more attractive
prices than Thailand.
To say that Europe’s sweet corn industries
THAI CANNED SWEET CORN EXPORTS, ANNUAL
200580 (tonnes) 2000 2001 2002 2003 2004 *2005
UK 1 723 4 451 10 559 12 576 16 988 16 076
Korea, South 4 775 7 060 8 802 10 618 9 257 8 821
Germany 3 377 2 427 4 257 7 439 9 256 8 523
Netherlands 685 728 1 360 3 610 7 362 8 083
Russia 32 1 382 4 429 3 013 4 555 6 863
Taiwan 1 068 2 391 3 855 4 741 5 313 4 443
Japan 2 238 2 212 757 3 440 3 882 4 153
Spain 3 0 2 998 5 198 4 241 3 573
Philippines 1 065 1 640 1 534 1 787 2 613 3 004
Lebanon 848 1 338 1 793 1 986 2 439 2 925
US 281 1 739 1 236 3 635 5 000 2 864
United Arab Emirates 93 247 391 452 746 2 457
Australia 164 226 423 229 768 2 354
Sweden 578 582 1 323 1 592 3 196 2 162
Others 8 939 9 425 13 726 15 802 20 190 23 423*
Total 25 869 35 848 57 443 76 118 95 806 99 724
Source: National trade statistics
*The figures for 2005 are not yet out for the entire year and so only run to November.
would have prayed for Thailand’s downfall
might be a bit harsh, but it is unlikely that
processors in France and Hungary will shed
many tears, as a number have seen their positions,
sales and profits slump due to Thai
competition.
Thai sweet corn exports have risen exponentially
over the last six years, and 2005’s
exports are on course (full year figures have
not yet been collated) to be four times larger
than they were in the year 2000.
UK imports to November are on course to
pass 2004’s total of 17 000 tonnes, which
means UK imports of Thai canned sweet
corn have been growing at a mean rate of
87%, although the really heavy increases
may now be behind us, with demand levelling
out. The year 2004 saw imports up by
35%, 2003 showed a 19% rise; 2002 a 137%
rise and 2001 a 158% rise. However, South
Korea, the second-biggest destination, which
has also previously shown strong growth
over the five-year period shown, tailed off
slightly in 2004, compared with 2003.
With the figures for December 2005 still
to arrive, it looks likely that 2005’s statistics
will fall again.
Germany is another destination whose
appetite for Thai canned sweet corn is growing,
and with the exception of 2001 when
there was a slight drop, the growth has been
steady and constant.
With the raw material shortages Thailand
has experienced recently it would not be surprising
to see exports for at least the first two
months of 2006 down on those of 2005, and
this will be the only really accurate gauge of
how much havoc the weather has played on
the country’s sweet corn industry. One thing
is clear, though: one can never write off
Thailand, but the Thai industry will be praying
for an incident-free summer crop.
European processors however, may be praying
for more of the same.
22

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