Food exports to China rising

Food exports to China rising

Q2 shipments expected to double

Thailand's food exports to China are likely to double in the second quarter, driven by a surge in demand after food stocks for the first quarter are depleted.

Visit Limlurcha, vice-chairman of the Thai National Shippers' Council and president of the Thai Food Processors Association, said that if the coronavirus epidemic can be kept under control in the first quarter, China's demand for imported food from Thailand is expected to double in the second quarter.

The value of Thailand's food exports average 1 trillion baht annually, while locally produced food earns 2 trillion baht in the domestic market. The domestic market could expand further because the Thai population is 70 million and the country has roughly 40 million foreign tourist arrivals every year.

Thailand is one of the world's leading food exporters, with rice making up the largest share at about 17.5%, followed by chicken, sugar, processed tuna, tapioca flour and shrimp.

The biggest food export market is Japan, followed by China, Vietnam, Indonesia, Myanmar, Cambodia, Malaysia and the Philippines.

Despite the surge in food demand from China, Mr Visit said the association still maintains a food export target of 5% growth this year to $34.9 billion, or 1.02-1.06 trillion baht.

Widespread drought remains a key threat, he said.

The Thai Food Processors Association forecasts the drought to drastically affect the supply of pineapple, coconuts, longan, rambutan, lychee, baby corn and sweetcorn.

Mr Visit said the baht's continued strength remains a key concern for exporters, as every one-baht gain against the US dollar erodes food export value by about 35 billion baht.

Thailand's food exports last year dropped 3.8% in baht terms to 1.025 trillion baht but rose 0.2% in dollar terms to $33.1 billion, while food imports amounted to 401 billion baht, down 0.1%.

Items that registered declines were rice, which fell 22%, sugar (-13.7%), canned tuna (-6%), shrimp (-9.2%) and pineapple (-15.7%).

The drop in the value of food exports was attributed to weak global demand, the strengthening baht and declining world food prices.

Global food trade last year amounted to $1.3 trillion, down 0.6%. Thailand's food exports accounted for 2.5% of world food trade.

Last year, China was Thailand's biggest food importer, replacing Cambodia, Laos, Malaysia and Vietnam collectively. Thai food exports to China amounted to 151 billion baht in 2019, a rise of 34% from the previous year, making up 14.7% of total food exports.

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