FTI trusts in operators to handle drought

FTI trusts in operators to handle drought

Only rice products are suffering from the widespread drought, says Visit Limlurcha, chairman of the FTI's food processing industry club. SEKSAN ROJJANAMETAKUN
Only rice products are suffering from the widespread drought, says Visit Limlurcha, chairman of the FTI's food processing industry club. SEKSAN ROJJANAMETAKUN

Although Thailand is dealing with the effects of a drought nationwide, the Federation of Thai Industries (FTI) is still optimistic about production sentiment for food, processed food and agriculture.

The FTI's food processing industry club forecasts that the widespread drought will be short-term and that business operators can handle the situation.

Visit Limlurcha, chairman of the club, said the rainy season should start in mid-May, then farmers can start their cultivation to supply food to processed food plants.

"The drought is not as big a worry if the rains come as expected," he said.

The club forecasts the food and processed food sectors to grow by 8% to 1.1 trillion baht in 2019, mainly from exports.

In 2018, the two sectors reached 1.08 trillion baht.

Mr Visit said the food and processed food sectors in the first quarter rose slightly by 0.5% to 251 billion baht.

Canned seafood products grew by 4.6% to 29.38 billion for the period, while frozen fruits soared 62.8% to 22.72 billion baht.

Processed chicken products increased by 2.5% to 5.64 billion baht in the first quarter, and processed and canned vegetables surged 24.5% to 3.63 billion baht.

"The main destinations for the period included China, accounting for 12% of total value, followed by Japan and the US, accounting for 10% each," Mr Visit said, adding that Southeast Asia is also a key market for Thai food exports.

But the drought situation has made a huge impact on rice because farmers cannot grow in the offseason.

Thailand's rice exports fell by 10.4% to 39.6 billion baht in the first quarter, according to the club.

For the overall food and processed food sectors, the government aims for Thailand to be among the top 10 exporters globally by 2020.

In 2018 the country ranked 12th, up from the 14th spot in 2017.

Mr Visit said the export sector and food and processed food companies are worried about the baht's volatility.

Currency fluctuation remains a key concern for all exporters because exports represent 65-70% of the country's GDP.

The FTI predicts exports in 2019 to grow by 3-5% because of external issues such as the slowing global economy and the US-China trade war.


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