The focus is now beginning to switch to processed chicken, exports of which have grown substantially. Although Thai producers face increasingly tough competition from China, the United States, and Brazil, the country's extensive experience in the chicken industry, along with a weaker baht, is expected to sustain the industry's competitiveness. No doubt Brazil's recent production difficulties will also prove to be a plus for Thai producers, while there has been talk of a tariff cut in Europe, which could also prove to be an even larger export market amid the BSE scare.

Processed chicken is a raw material for instant foods, which have proved to be extremely popular in foreign markets. Although exports fell between 1998-99, they have rebounded, and stood at 56,286 metric tons in 2000 (Jan-Oct 2000). The total estimate for 2000 stands at around 70,000 metric tons. Exporters are also turning to the export of higher value-added products, such as processed chicken. There are a host of joint ventures between local and foreign partners, which are focussing on developing high-quality, value-added products that are convenient and easy to preserve. Thailand already dominates the Japanese processed chicken markets with a variety of products, such as chicken on a stick, chicken skin and entrails on a stick, grilled, baked, and fried chicken, as well as chicken ham.

Although the weaker baht is helping the agro sector, making exports more competitive, the country needs to be aware that this is a short-term benefit, and that by its very nature, the sector remains highly dependant on the availability of resources.

To prepare the industry for a more competitive climate, ongoing long-term measures need to be implemented to create an environment suitable for sustainable growth. More research and development is required in order to improve production efficiency, standards and quality. Effort is also required to ensure more value-added products are developed so that the industry will be strengthened in the long run.

Despite the fact that the price of chicken has declined in the world markets, there are still great prospects for processed chicken. When produced to the strict standards set by importing countries, processed chicken has great potential in overseas markets. Businesses involved in the production of frozen chicken that are not currently engaged in processing, should consider doing so.

Manufacturers must continue to focus on developing products that meet the demands of overseas markets, while pursuing other markets outside of the EU and Japan, such as countries in the Middle East. This will help lift processed chicken exports to higher levels. Although rivals China, Brazil and the U.S. can boast lower production costs, it is not beyond Thailand's potential to become a leader in this market.