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12 Feb 2016

Industry

Ready Meal Exports to Resume Growth, but NTBs may Spoil Food Industry Outlook (Current Issue No. 2702 Full Ed.)

In 2016, Thailand's food exports are predicted will improve over the 2015 contraction of 5.8 percent to reach perhaps (-)2.6 to (-)0.2 percent growth YoY; sales are estimated at USD27.34-28.00 billion. Although exports value of raw materials in the food industry will expect a drop owing to low agro-product prices, overall food shipments see somewhat brighter prospects since exports of ready-to-eat meals and beverages are predicted to resume growth for the first time in four years; with export value forecast at USD14.08-14.45 billion, expanding 0.7-3.4 percent YoY. Resumption of growth this year can be attributable to hefty shipments of ready-to-eat food and beverages sold by major manufacturers that have been caught out since last year. Growth has been exceptional in processed chicken, fresh/canned/processed fruit and drinks that should counterbalance stubborn shrinkage in canned and processed seafood exports that are certain to continue into this year. This is calculated based on an assumption that the EU will renew the yellow card given to Thailand for failing to address IUU fishing (Illegal, Unreported and Unregulated fishing) for another six months. The EU will announce its decision in May in a move that would determine Thailand's future fishery exports to the European Union.

The Thai food industry also has to battle non-tariff barriers (NTBs) that will affect our food industry, including the US's penalties for IUU fishing, as well as the US's and EU's ban on ‘trans fats' as ingredients in processed food. Details of how the regulation will be imposed, i.e. coverage and penalty for each measure, are yet to be revealed. Notwithstanding that, Thai food producers are well-known for their product quality and manufacturing standards, and that may help them weather this storm.

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