Thai sweet corn products – an emerging lucrative export - are now running into a snag. On December 29, 2006, the EU Commission announced imposition of anti-dumping (AD) duties in a range of 4.3-13.2 percent (varying with each company) on Thai canned sweet kernel corn. Despite the preliminary announcement of this AD penalty, Thai exporters of canned sweet corn have already felt the pinch. This is because the AD penalties have resulted in EU importers being charged with import guarantees on shipments of canned sweet corn from Thailand. EU importers of sweet corn thus are not confident about the status of Thai sweet corn shipments.
Still, the fate of Thai canned sweet corn in the EU market will be decided with the EU's final announcement on AD duties in May 2007. If the EU does impose the AD penalties, exports of Thai canned sweet corn will inevitably be hurt for the five years ahead (2007-2011). This will likely have repercussions on the local sweet corn industry, resulting in cuts in sweet corn production and affecting more than 200,000 households of corn growers. The higher tariff rates would also erode the competitiveness of Thai products, bite into demand from consumers and eventually dent the prices of sweet corn domestically.
Despite the AD penalty, Thailand remains the largest non-EU exporter of canned sweet corn into the EU market, accounting for 74.0 percent of the EU's entire imports of the product from non-EU countries. During 2002-2004, Thai canned sweet corn experienced leapfrogging growth. However, Thai shipments of canned sweet corn to the EU market began to have problems since Hungary – another exporter of sweet corn - was embraced into the EU in May 2004. In 2005, imports of Thai canned sweet corn to the EU market dropped to USD47.50 million, down 0.1 percent from the year before. In 2006, European Sweet Corn Processors' Association (AETMD) filed a complaint to the EU Commission to have Thailand investigated on a charge of dumping canned sweet corn into the EU market. The move thus led to a preliminary AD penalty. As a consequence, Thai canned sweet corn exports to the EU market in 2006 declined in continuation from the year earlier.
During the first 11 months of 2006, Thai canned sweet corn shipments to the EU fell to USD41.84 million, down 7.0 percent, over-year. It is projected that if the EU imposes another AD on Thai canned sweet corn, Thailand's exports will fall invariably over the next 5 years because we will lose competitiveness, and it is expected that France and Hungary will be able to retrieve their market shares. China and the US are the countries outside the EU that are Thailand's rivals and whose market shares on canned sweet corn in the EU have increased the most. These two countries are Thailand's key competitors in the exports of canned sweet corn to the EU market.
Namely the import value of Chinese canned sweet corn to the EU in the first 11 months of 2006 rose to USD0.54 million, representing an increase of 155.0 percent over the same period of the preceding year. Meanwhile, the import value of US canned sweet corn to the EU market in the first 11 months of 2006 increased to USD5.03 million, which was 10.2 percent higher than the same period of the preceding year. Although the market shares of these two countries are still far from Thailand's level, with proportions of only 1.0 percent for China and 8.9 percent for the US, the impact of the AD penalties specifically imposed on Thai exporters of canned sweet corn is deemed an important factor that will lead importers in the EU to turn to importing from these two countries instead.
Factors that could relieve the impact of the problems with the EU include:
1. Boosting Domestic Consumption: In the health-conscious trend, promoting domestic consumption of sweet corn products would be a proper solution for the falling exports of canned sweet corn to Europe. As sweet corn is a vegetable that also has a high amount of fiber, it is well-suited as a food for health. A point of concern is that, while Thailand is an important exporter of sweet corn to the global market, we also rely on imported products. If campaigns are launched domestically urging consumers to eat more locally produced sweet corn, the domestic market will grow. In addition, this would also help save foreign exchange earnings. In 2006, Thailand imported 49.11 tons of fresh, chilled and frozen sweet corn at a value of THB2.03 million, both volume and value falling 34.4 percent and 48.4 percent, respectively, compared to 2005. This is due to the fact that producers of sweet corn products expanded more into the domestic market after export markets started facing problems. Considering the statistics of 2004-2005, the import volume and value on fresh, chilled and frozen sweet corn into Thailand had increased sharply then. In 2003, the import volume was 36.83 tons, with a value of THB 3.16 million. In 2004, the volume and value rose to some 25- and 5-fold, respectively. In 2005, the import volume and value rose to 75.00 tons, with a value of THB 3.93 million or both volume and value rose 100 percent and 24.4 percent respectively.
Although imports of canned sweet corn increased swiftly in 2005, the volume and value in 2006 dropped. Last year, the volume of the imported canned sweet corn was 25.02 tons, with a value of THB2.13 million. Compared to 2004, the volume and value had risen 4- and 6.5-fold, respectively. However, the import volume in 2006 dropped to 5.7 tons, with a value of THB 0.48 million, the volume and value dropping by 77.2 and 77.5 percent, respectively.
2. Export Expansion Aside from the European Union market, Thailand has other interesting markets for the exports of fresh, chilled and frozen sweet corn products, including the canned sweet corn. Those markets can be expanded and Thailand can enter new markets, as well.
In the matter of expansion of exports of fresh, chilled and frozen sweet corn, Thai sweet corn products are acceptable in quality. At present, the demand for fresh, chilled and frozen sweet corn in the global market is increasing. This is an opportunity for Thailand to increase exports. Thailand should diversify markets more. At present, we depend mainly on the Japanese market. Nonetheless, other interesting markets which the authorities should give attention to include the USA, Canada, Australia, Iran, Saudi Arabia, Taiwan and Tunisia. Thailand's exports right now depend on the European Union with a value of 28.3 percent out of the entire export value. But, there are other interesting markets for the export expansion, such as Japan, Russia, Taiwan, Australia and the Philippines. – KResearch
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