Thai producers urged to take advantage of Russian sanctions

Thai producers urged to take advantage of Russian sanctions

Thailand's livestock products, fruits and vegetables, and canned tuna are expected to benefit most from Russia's recent ban on American and European Union food imports.

"Thai exporters need to take this opportunity to ramp up their exports to Russia," said Pornsil Patchrintanakul, vice-chairman of the Thai Chamber of Commerce. 

On Thursday, Russia announced the suspension of billions of dollars in food imports from a number of countries — including Norway, Canada, Australia, the US and the 28-nation European Union — in retaliation for sanctions imposed on it by those nations over the past few weeks.

The measure, which targets meat, fish, fruit, vegetable and milk products and which will last a year, is expected to hit food supplies and drive up Russian food prices. Russia spent nearly US$10 billion on food from those countries that will now be banned.

Thailand last year fetched 35.2 billion baht worth of exports to Russia in 2013, a marginal rise of 0.37% from 35 billion baht in 2012, according to the Customs Department.

For the first six months of this year, the figures rose 12.6% to 19.6 billion baht from 17.4 billion baht in the same period last year. Key export products include automobiles and parts, gems and jewellery, plastic pellets, canned and processed fruit, and rubber products.

Mr Pornsil forecast overall Thai food shipments this year should grow about 5% to 900 billion baht mainly driven by rice, sugar and particularly frozen chicken, now allowed to be imported into Japan.

Japan agreed late last year to resume imports of Thai fresh chicken, banned for 10 years after a bird flu outbreak in 2004. But it would take several years before exports of fresh chicken to Japan would reach 200,000 tonnes, the amount purchased by Japan before the ban.

Kukrit Arepogorn, manager of the Thai Broiler Processing Exporters Association, said the country was expected to ship 560,000 to 570,000 tonnes of fresh and processed broilers worth 78 billion baht this year, up from 530,000 tonnes worth 70 billion baht last year.

Thailand's chicken exports look promising in the second half thanks to higher shipments to Japan. More importantly, from July Thailand can ship processed chicken to fast-food outlets in the Philippines after the lifting of a 10-year ban due to the avian flu, he said. 

The latest outlook published by the UN Food and Agriculture Organization suggests global poultry production is expected to grow by 1.6% to 109 million tonnes this year.

The expansion is driven largely by developed economies as production in developing countries declines.

The global trade in poultry meat has doubled over the past decade. Growth slowed in 2012 and 2013, but a 2.4% increase is anticipated this year.

But Mr Pornsil said Thailand's food export industry is facing risks from higher production costs ignited mainly by the high minimum wage,  labour shortage and high utility costs such as water and power bills. Other risks include diminishing natural resources, limited arable land and foreign non-tariff measures such as labour and environmental standards.    

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