March 13 - Thailand offers significant opportunities in the food processing sector as domestic sales and exports of processed foods continue to rise.
In 2008, Thailand imported approximately $1.4 billion in food ingredients, a 25 percent increase from the previous year. Despite the global economic downturn, Thai food manufacturers will still seek high-quality food ingredients at reasonable prices. U.S. suppliers should focus their attention on new functional food ingredients, flavors and other ingredients for promoting health and wellness benefits in foods.
Economic Situation and Market Summary
Thailand is one of the worlds leading agricultural suppliers, which is driven by a well developed food processing sector. The agriculture sector accounts for 10 percent of the country’s GDP and employs around 50 percent of the labor force. Major food exports include rice, seafood products, sugar, meat, vegetables and fruits. Thailand is the world’s largest supplier of frozen shrimp and is a major exporter of chicken. Thailand is also a major importer of agricultural products, including a wide range of food and beverage products and food ingredients. Thailand’s main food and beverage imports are dairy products and soybeans. Thailand offers many opportunities in the food processing sector as domestic sales of processed foods continue to rise on strong demand from both retail and food service sectors.
Thailand’s Exported Food Products 2005-2008 (in $Million)
|
Export Items |
2005 |
2006 |
2007 |
2008f |
|
Livestock:
Chicken and poultry |
852 |
1,022 |
1,162 |
1,247 |
|
Fishery:
Shrimp
Canned and processed tuna
Chilled and frozen fish
Squid
Other canned/processed fish |
4,024
1,742
1,107
445
396
333 |
5,012
2,374
1,344
483
441
372 |
5,275
2,489
1,321
539
485
442 |
5,578
2,584
1,460
537
514
484 |
|
Vegetable and fruit:
Canned and processed fruit
Vegetable products
Fresh and dried fruit
Vegetable and fruit juice |
1,579
688
414
293
183 |
1,931
828
523
337
243 |
2,076
900
542
387
247 |
2,358
1,038
584
443
292 |
|
Other food products:
Rice
Sugar
Palm oil
Cassava products
Cassava flour and starch
Flour and starch
Rice products
Seasonings
Non-alcoholic beverage
Pet food
Animal feed
Other foods not specified |
2,276
689
92
311
236
76
90
159
110
328
51
1,774 |
2,672
760
138
471
383
99
107
199
132
399
96
2,011 |
3,306
1,330
275
631
404
106
135
233
174
456
283
2,048 |
3,379
1,138
289
780
460
124
129
264
205
511
302
2,495 |
|
Total |
12,648 |
15,433 |
17,894 |
19,262 |
(Source: Department of Trade Negotiations and Food Institute)
Due to the global economic downturn and a slump in exports and tourism sectors, Thailand's economy in the fourth quarter of 2008 contracted by 4.3 percent. Economic growth in 2009 is forecast to be between -1 percent and 0 percent. It is estimated that Thai economy is likely to contract for four consecutive quarters before generating positive growth in the fourth quarter of 2009. The Thai National Food Institute forecasts Thailand's 2009 food exports will fall due to weak global demand and deteriorating consumer spending in the US, EU and Japan. However, the country’s food exports are forecast to reach $22 billion due to strong government support and incentives for export-oriented companies in agriculture and processing ventures. Thailand’s 300 billion baht ($8.6 billion) economic stimulus package is expected to improve the Thai economy.
Post estimates the ongoing global economic situation could force Thai food exporters to shift their focus on other Asian and emerging Middle Eastern markets to offset losses from traditional markets. Falling oil prices has helped reduce production and shipping costs for food manufacturers, and a weaker Thai baht will help Thai food manufacturers compete with other food exporting countries. Despite the global economic situation, Thai food manufacturers will still seek high-quality food ingredients at reasonable prices. The US is considered to be a world leader in food ingredient technology and one of the major food ingredient suppliers to the world. U.S. suppliers should focus their attention on new functional food ingredients, flavors and other ingredients for promoting health and wellness benefits in foods.
Thailand’s food industry is divided into four major categories, including primary agricultural products, livestock and poultry, fisheries, and processed foods. Processed foods include fruits, vegetables, shrimp, seafood, poultry, poultry meat products, rice grain, cereal products, sugar, confectioneries, juice and other beverages. In 2008, food and agricultural exports from Thailand exceeded $38 billion, 23 percent growth from the previous year. There are over 10,000 food and beverage processing factories consisting of small, medium and large-scale plants. Most of these factories, which are small to medium size, serve mostly the domestic market, while medium to large food processors tend to produce higher-valued products for the domestic and export markets. Major export markets are Japan (14 percent), the US (13 percent), and the EU (14 percent).
Thai food processors are developing value-added products for these markets as well as domestic high-income consumers. Thailand has a large (63.04 million) and young (37 percent under age 26) population and rising income levels. Thailand’s increased awareness of world food tastes and preferences has stimulated significant changes in the attitudes and consumption patterns of Thai consumers. Moreover, rapid urbanization and the growing numbers of women in the workforce has increased demand for processed foods and ready to eat meals.
Numbers of Food Manufacturers in Thailand 2007
|
Type of Food Manufacturers |
Small |
Medium |
Large |
Total |
|
Ice |
1,446 |
23 |
3 |
1,472 |
|
Bakery and Noodles Products |
1,162 |
57 |
14 |
1,233 |
|
Fishery Products |
551 |
81 |
35 |
667 |
|
Fruit and Vegetable Products |
562 |
62 |
31 |
655 |
|
Meat and Poultry Products |
548 |
42 |
45 |
635 |
|
Seasonings and Spice |
441 |
32 |
17 |
490 |
|
Bottled Water and Non-Alcoholic Beverages |
306 |
14 |
26 |
346 |
|
Vegetable and Animal Oils |
193 |
50 |
21 |
264 |
|
Ice-Cream |
243 |
3 |
3 |
249 |
|
Flour and Starch |
145 |
48 |
29 |
222 |
|
Snack, Chocolate and Confectionery |
148 |
13 |
8 |
169 |
|
Cereal Products |
145 |
5 |
3 |
153 |
|
Dairy Products |
113 |
15 |
18 |
146 |
|
Tea and Coffee |
121 |
2 |
5 |
128 |
|
Syrups and Sugar |
57 |
16 |
46 |
119 |
|
Alcoholic Beverages |
23 |
22 |
30 |
75 |
|
Tapioca |
2,412 |
11 |
1 |
2,424 |
|
Feedstuff |
618 |
71 |
23 |
712 |
|
Total |
9,234 |
567 |
358 |
10,159 |
(Source: National Food Institute)