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17 Jun 2005

Agriculture

Thai Herbal Products, 2005: Bt48 Billion Market Turnover

คะแนนเฉลี่ย

Herbal products have gained greater popularity in the global market thanks mainly to aggressive sales promotions launched by large producers to create greater recognition of their products among consumers, plus the building of a positive image for these products, not to mention the prevailing trend toward natural and organic product consumption. These factors have contributed to recognition and demand for herbal products among consumers worldwide.

In Thailand, herbal products have also been in higher demand in the market. They are used in various businesses, i.e., food supplements, herbal cosmetics, herbal massage treatments and in steamed herbal compresses, herbal health drinks and herbal medications, which have all developed rapidly. In effect, businesses related to spices and herbs are very lucrative right now and still have further room to grow. This can be seen from the market for herbal products that has grown at least 20-30 percent per year due to the popularity and widespread use of these products.

Kasikorn Research Center (KRC) recently conducted a survey on "Consumer Behavior toward Herbal Products" using a sampling group of 3,294 persons across the country, distributed by region. As far as estimates go, expenses for herbal products in 2005 are projected to top some Bt48 billion. This calculation is based on consumption behavior presented in terms of expense and frequency of use. So far, the total market value of herbal products at home has grown steadily thanks to greater popularity of herbal products that has grown in line with the prevailing health-conscious trend where people are tending toward higher consumption of health-care products. This trend is prevailing both market domestically and abroad.

Expenses for Herbal Products in 2005
Units: Million Baht
Product Type
Greater Bangkok
Central region
North
North-east
South
Total
Herbal food supplements 3,360 1,550 1,960 2,000 820 9,690
Herbal medications 2,700 1,950 1,370 1,990 800 8,810
Herbal cosmetics 3,200 2,850 2,200 2,090 850 11,190
Herbal drinks 2,500 2,300 1,600 2,050 920 9,370
Herbal products for massage

/steamed herbal compress
2,200 2,000 1,280 2,080 900 8,460
Total
13,960 10,650 8,410 10,210 4,290 47,520

Source: KRC Poll

On the export front, the popularity of herbal products is also high. However, herbal products earmarked for foreign markets include only spices, herbs and herbal extracts, which are still low in value compared to other key export items. Exports of herbal products in 2005 are projected to total only around Bt1.56 billion. In fact, herbal product exports also incorporate a wide variety of food products. Thus, the proliferation of Thai restaurants/food shops in foreign lands would be a boon to exports of such ingredients for cooking, particularly curries and seasonings. Also, herbal products could receive a windfall from the popularity of traditional Thai massage and spas. Traditional Thai massage and spas where 'Look Prakob', i.e., hot compresses containing medicinal herbs and herb-based aromatic oils are used, plus herb-based cosmetics and herbal health drinks have gained greater popularity abroad, thus generating huge sums of foreign exchange income for the country each year. This trend is poised to continue in the future. Against this backdrop, herbal products are worth monitoring.

Even so, a point that should not be overlooked is that Thailand has to rely on imports of herbal products totaling around Bt2.5-3 billion each year. Some of these imported products cannot be produced domestically, and are used by restaurants and food shops abroad and fast food shops at home, while some of them are herbal extracts used in pharmaceutical industry and the production of food supplements. In fact, some types of herbal extracts can be derived from local raw materials. Unfortunately, no formal research has been conducted for the extraction of some potential locally-grown herbs and the country still falls short of sophisticated instruments for such production. Therefore, the guidelines that will help to reduce imports of spice and herbal products are encouraging researching, procurement of modern equipment and tools, and finding skilled researchers to produce herbal extracts for domestic use.

The government can support herbal products by encouraging and promoting the development of spice and herbal products that have quality and commercial viability. Developing the herbal products industry into a fully integrated system from raw materials, on to research and processing at international standards, as well as promotions and marketing domestically and internationally would offset imports until the potential to compete in the world market is reached. Thailand should be promoted to become the center of herbal trade in Asia in the future. Moreover, the government must lay down a fully integrated strategy to develop herbal products and announce a proactive policy to set up this strategy to develop spice and herbal products as economic products of the country. Thai herbal products will thus gain greater recognition from overseas.

For the private sector, a 'development strategy to increase the competitiveness of the herbal industry' is proposed because it is foreseen that Thai herbal products have the chance to grow dramatically. The market for Thai herbal products is still quite small compared to the trade value of herbal products in the world market that is as high as Baht4.4 trillion per annum. Even Thailand has the potential to develop Thai herbal products from its bio-diversity of more than 13,000 types of herbs that can be used as raw materials. But, at present, there are only 21 types of herbs that are on the list of pharmaceutical standard constituents and only 5-6 of them are used to make herbal products. Therefore, the market for Thai herbal products is still wide open for investment to research and develop them. The private sector has proposed that the government improve rules and regulations to make them more favorable to the development of the Thai herbal industry. Support for intensive research to promote the serious use of herbal products with the cooperation of state sector and educational institutions is needed. They can transfer knowledge to the private sector for further commercial development and create globally recognized brand names for Thai herbal products.

Moreover, entrepreneurs in the herbal product business have registered an Association of Thai Herbal Industry, which is expected to officially begin operations around July-August 2005, with the objective of helping develop Thai herbs and strengthen entrepreneurs in the market. Expansion of the market for Thai herbal products both domestically and overseas will of course be sought, as well as acting as an agency to liaise with the government sector in marketing support, and help with research and product development.

Herbal products are considered an agricultural product with the potential to grow, and Thailand has a chance to step up to become the production center of herbal products in Asia. The country would gain an important role as the top exporter of herbal products in the world, because Thailand has supportive factors in the diversity of its natural herbs. However, Thai herbal products still need a driving force from both the related state and private sectors in matters ranging from research on market demand, encouragement for growing herbs commercially, modern manufacturing processes, and conducting public relations to inform consumers both inside and outside the country to recognize Thai herbal products. Supporting research and development of Thai herbal products would underlie the qualifications of herbs, which would be vital to the expansion of markets both domestic and overseas.

Agriculture