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1 Feb 2012

Industry

Thai Food Exports to China, 2012: USD2.1 Billion, Up 14.3% YoY (Business Brief No. 3241)

It will be worth keeping an eye on China's food market for our exports as it offers ample opportunity for exporters to tap into this huge market. Despite the fact that China is the world's fourth largest food exporting nation after the EU, US and Canada, it is expected that China will need to increase its food imports for several reasons. These include limits in arable land, a growing population, changing consumer behavior as a result of rising disposable income and a surging urban populace. Thailand, as an important food-exporting nation, has the potential to expand food production to meet growing demand there. We have, however, typically sustained a trade surplus on food with China, wherein that surplus reached USD130 million in 2011.
Due to bright prospects seen in our food exports to the mainland, KResearch forecasts that China's imports of Thai food products will reach perhaps USD2.1 billion in 2012, increasing 14.3 percent YoY. Food categories that will excel include tropical fruit, tapioca flour and rice. Thai tropical fruit exports in particular will likely benefit from China's rapid economic growth and soaring prosperity, especially in western inland provinces and on their Pacific coast, plus improved transportation networks linking Thailand with southern China. In addition, China's requirements for cassava flour (and processed forms thereof) remain strong due to insufficient domestic production. Thai rice exports – especially ‘Hom Mali' fragrant rice – will continue to do well in China, thanks to continuing demand from gourmet restaurants, hotels and affluent consumers. However, Thailand must solve the problem of adulterated rice.
Thai exporters need to be vigilant toward rising competition in many food categories from ASEAN rivals, e.g., Vietnam, Malaysia, Indonesia and the Philippines. We will have to compete with local Chinese products, too, because they are improving both volume and quality. Thai exporters wanting a place in the Chinese market are advised to promote our quality over rivals.

Looking ahead, Thailand has the potential to export many value-added food products to China. Among them are processed food products (canned fish, sugar, canned fruit, etc.), shrimp products (e.g., processed shrimp), food seasonings and ready-to-eat foods. Exporters entering the Chinese market should study consumer behavior there – buying habits and lifestyles – in the destination regions. Last but not least, they should forge business alliances and find effective distribution channels to better reach consumers, as well.

Industry