Thai Processed Chicken Exports, ’09: Better due to Japan (Business Brief No.2623)

's exports of processed chicken are projected to come out better than forecast at the beginning of 2009. It is expected that the exports in 2009 will increase to 370-380 billion tons, rising 2.8-5.6 percent over the prior projection that the volume would have dropped 7.0-9.0 percent. The export value increased to THB53 billion (USD1,550 million) – 5.4 percent higher YoY (a 2.0 percent increase in USD) – wherein it was believed earlier that export would total around THB40-45 billion (USD1.170-1.316 billion). This has urged chicken farmers to increase poultry breeding substantially.

Exports of processed chicken have been dramatically better than forecast mainly due to the Japanese market that shifted to importing processed chicken from instead of because of food safety. However, over the remainder of 2009, exporters of processed chicken should keep watching whether they take back their former market share.

As for exports to the EU, despite the fact that is the top exporter in this category, in 2009, many EU importers turned to instead. Penetrating the EU processed chicken market mainly hinges on bilateral talks with them on two issues, being the transfer of the EU quota for Thai salted chicken to Thai processed chicken (because Thailand sees little opportunity to export salted chicken, normally deemed a fresh meat). This is because is still not certified as a bird flu-free zone.

The other matter is that the EU told the WTO that they would change import duties on some poultry items; , as the top market share holder there, has to expedite negotiations with them to seek compensation for losses because Thai exporters of processed chicken have been hurt by prohibitive duties.