Food export value tipped to fall 3% on virus impact
Thailand's food export value is expected to dip by 3% this year from an earlier target of 1.02-1.06 trillion baht, as exporters believe the industry will be slow to recover from the impact of the pandemic.
The months-long business shutdown, ban on inbound flights, weak purchasing power and recent baht appreciation have all dealt a blow to the industry.
Food exports declined last year, recording a value of 1.02 trillion baht, down 3.8% year-on-year. Food accounted for 76.5% of overall export value.
In this gloomy business atmosphere, the food industry will find it difficult to recover, said Visit Limlurcha, chairman of the Federation of Thai Industries' food processing industry club.
"We are stunned by the crisis," he said. "The pandemic destroyed the club's optimistic view for a better export outlook this year."
Drastic measures to contain the virus saw airlines, hotels and restaurants dramatically reduce their orders for food.
"These businesses once bought premium-grade food from Thailand, but today Thai food exporters receive few or no orders," Mr Visit said.
Though governments in many countries have eased their lockdowns, allowing businesses to resume their activities, in his view many people are still reluctant to spend money and travel.
Export value for the January-April period this year fell by 2.2% year-on-year to 368 billion baht as the coronavirus started to spread worldwide, according to the club.
Thailand ranks 11th among global food exporters, but in Asia it's second (after China) with more than 35 million tonnes of exported products.
Domestic food trade is valued at 2 trillion baht, partly due to contributions from foreign tourists.
The food industry depends heavily on the tourism sector, which recently has drawn 35-40 million visitors a year.
"They need food and beverages," Mr Visit said. "They are an important customer group that supports us."
The food industry processing club is also worried about the strong baht, with the foreign exchange rate sliding to 31-31.50 against the US dollar. This not only affects tourism, but the export sector as well.
The ideal rate is between 33 and 34 baht to the dollar, the club said.
According to the Industry Ministry, food and drink factories in Thailand numbered 53,642 last year. Up to 43,725 of them were in agribusiness, followed by 9,102 in food processing and 815 in beverage manufacturing.