Thailand Food Industry 2006 - GBR

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