Sweet corn situation: Review of 2002   Published on April 8, 2003

Raw material overview

Supplies of sweet corn in Thailand increased each year between 1999 and 2001. Attractive prices in 2000 caused sweet corn growers to expand their cultivating areas and other vegetable planters to switch to sweet corn. It also increased the number of factories making sweet corn products.

However, in 2002, the situation became much gloomier. There were limited supplies all year because of a shortage of ATS2 seed at the beginning of the year. Levels of fresh supplies available in the market were very low, increasing slightly in March and April, which is considered a shorter period than usual. The shortage directly affected canned sweet corn factories, some of which had to halt production for a while. There were also some reports that sweet corn planters switched to cultivate other crops that gained a better price.

There was interesting news of the discovery of a new variety of sweet corn seed - ATS3 - at the beginning of the year. ATS3 was developed by breeding Thai and US sweet corn. It is sweeter and larger and improves yields for farmers. It is estimated that fresh sweet corn production would reach only 180,000 tons (whole cob weight) in 2002, despite a continued expansion in planted area in major cultivating regions in response to the relatively more attractive return from corn contract farming as compared to sugar cane, the alternative crop, according to the report from USDA. The price of fresh sweet corn in 2002 was approximately 3-4 baht per kilogram, compared with 3 baht per kilogram in 2001.

Thailand has about 400,000 rai of sweet corn cultivating areas (1 rai = 2.5 acres), and output is about 6,000 tons per year valued at 800 million baht. Accounting for 4 percent of global production, Thailand is now the fourth biggest sweet corn producer in the world after the US, France and Hungary, which account for 37, 17 and 14 percent of global production volume, respectively.

Weather woes

Unfavorable weather and Downy mildew disease continued to be dominant problems for Thai sweet corn cultivation in 2002, directly affecting the volume and quality of supplies.

In March and April, there were some reports that high temperatures and drought damaged a lot of sweet corn supplies in main producing areas, resulting in small vegetables with missing kernels. Weights were also low, with 4-5 ears of sweet corn needed for 1 kilogram, whereas in the past only 3-4 ears were needed. Sweet corn plants need a lot of water to grow.

From May to August, Downy Mildew disease (Peronosclerospora Sorghi) spread across the major growing areas in the Central Plain, which account for over half of total production. The disease is a major threat to sweet corn and occurs every rainy and cool season as a result of humidity. The disease was discovered in August and many supplies were damaged.

Farmers had to stop cultivation in that area for a while to ease the disease.At the end of the year, heavy rain and flash floods hit the main cultivating areas in the north, including Chiang Mai, Chiang Rai, Nan and Lumpoon, which cover about 30 percent of total production. Worms also spread in some areas. A large amount of raw material was damaged. Sweet corn farmers could not grow their new crop for a while because the land remained soggy.

Market trends and development

Thai canned sweet corn exports are expected to be positive for the next 3-4 years, as US supplies appear to be poor quality and there continue to be concerns over GM products from the US, the world's largest supplier of canned sweet corn. As a result, non-GM canned sweet corn from Thailand is becoming more attractive due to the relatively cheaper export price.

There is another concern over US sweet corn. After the September 11 terrorist attacks, fears of anthrax have dented consumer confidence in American supplies.

The Philippines and Indonesia are also competitors for, but these countries are of less concern as Thai sweet corn is considered better quality.

The Thai Ministry of Commerce has warned Thai canned sweet corn exporters to declare production certificates if they are shipping goods to South Korea. Otherwise, their products could be charged a tariff rate of 50 percent, which is currently applied to processed vegetables (Code No. 2008.99.9000). In fact, the appropriate tariff rate for sweet corn (Code No. 2005.8.0000) is only 20 percent. The reason for the warning may be traced back to a case in 1992 when shipments of Thai canned sweet corn destined for South Korea were detained on claims that Thailand had no sweet corn cultivation. Therefore, Thai sweet corn was put into the processed food category, which was subject to a higher tariff rate. In order to resolve this problem, the Thai Ministry of Commerce and the Ministry of Agriculture and Agricultural Cooperatives have since cooperated to issue sweet corn production certificates to exporters as proof of eligibility for the lower import tariff.

Exports of Thai canned sweet corn, 2000-2002

The Thai Customs Department reported that the total export volume of canned sweet corn in 2000 was 25,868 tons. This increased to 35,816 tons in 2001 as a result of increasing demand from foreign buyers. In 2002, Thailand exported 57,442 tons of canned sweet corn, an increase of 38 percent from 2001. The main destinations for Thai canned sweet corn were the Republic of Korea, Germany, Argentina, Japan, China and the UK. In both 2000 and 2001, the main destination was the Republic of Korea, accounting for 4,774 tons and 7,044 tons, respectively. However, in 2002 the main destination was the UK, which imported 10,559 tons of Thai canned sweet corn, up 58 percent from 4,451 tons in 2001. It is expected that canned sweet corn exports will increase further as a result of increasing demand.

The market in 2003

The outlook for Thai sweet corn in 2003 continues to be positive, due to strong demand from both domestic and foreign markets. However, limited fresh supplies in the market as a result of unfavorable weather will continue to be an obstacle.

Source: FoodMarketExchange.com