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28 Apr 2009

Thai Economy

New Mexican Flu Outbreak: Impact on Thai Exports (Current Issue No.2156)

The outbreak of the new Mexican Influenza has been declared ;a public health emergency of international concern” that threatens to become a global pandemic. The World Health Organization (WHO) has thus issued global alerts on the new deadly virus. Countries worldwide have been urged to undertake increased examinations and surveillance, and to report on their situation to the WHO. In the most recent developments, the WHO raised the level of influenza pandemic alert to Phase 4, indicating a significantly increased risk of pandemic. In Phase 3, an outbreak is believed to spread animal-to-animal, but with limited human-to-human transmission occurring in some circumstances. Alert Phase 4, according to the WHO, is characterized by verified human-to-human transmission of a virus, which could then cause ;community-level outbreaks.”
Thailand, like everywhere else, has been on the alert to tackle the spread of this potentially fatal new virus. Beef-up measures, especially monitoring and screening tourists and passengers arriving from flu-affected countries, have been imposed. The most pressing issue for the government will be to provide accurate information on the disease to ensure adequate understanding about it. Reduced pork consumption may even worsen matters wherein the pig industry is already in difficulty amid hefty production costs. Unprecedentedly high pork prices have caused many consumers to shift to other types of meat instead.
However, Thailand will likely receive a windfall from this situation because many countries will avoid importing pork from the USA; among them would be Japan. The benefit that we could receive will depend on Japanese pork consumption behavior. If the Japanese continue to consume pork unabated, a bright future will lie ahead for exports of processed pork to Japan. Nonetheless, only existing exporters who undertake Japanese hygienic standards will enjoy this benefit because their quality and branding have been accepted by the Japanese. Nonetheless, pork production here would be unlikely to serve such growing demand, thus supply problems would be a drawback in this case. On the other hand, if Japanese consumers shun pork consumption for health reasons, coupled with the rising price of pork, they might turn to chicken, beef or fish instead. In that case, Thai chicken and fish exporters might get a windfall.

Currently, Thailand is the world's largest exporter of processed chicken and minced fish meat/surimi. Our processed chicken and minced fish meat are well accepted in the Japanese market. Considering our production and raw materials, fish products might be more constrained in supply because of our need to import raw materials, and the tough competition in the Japanese market. Chicken production, however, is better prepared for higher demand. As a result, chicken farmers and exporters would be the best beneficiaries from this outbreak of new Mexican influenza.

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Thai Economy