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 Thai
Trends, Outlook, and Situation
General view of 2003 chicken trends
Thai broiler meat production in 2003 is forecast to grow by
4-5 percent from 2002, mainly because of surplus breeding
stocks and a continued improvement in overall productivity
in broiler farming. Despite increased competition among exporting
countries, a current global supply surplus and rigid trade
barriers by importing countries, Thailand has great potential
to expand its broiler production over the next 3-5 years.
This is mainly because Thailand has successfully diversified
its broiler meat products, from depending only on basic uncooked
boneless parts into premium-quality cooked products. This
should help Thailand overcome its disadvantage of relatively
higher feed costs against competitors like the US and Brazil.
In response to the recent emergence of
residue problems in broiler meat exported to the EU in 2002,
both the Thai government and integrated poultry producers
have acted to resolve the problem. The government set up guidelines,
which include: a) controlling the import of drugs/chemicals
and their derivatives which contain prohibited substances;
b) regulating all drug use in animal feed manufacturing; c)
regulating all drug use on farms; and d) monitoring the level
of drug residues in all meat products. Meanwhile, nearly all
integrated poultry processors strictly control their operations
at all steps, from feed milling and breeding to processing.
According to trade sources, these stringent controls should
benefit Thailand by improving its food safety status.
Although Thailand's broiler meat exports
should grow steadily over the next 3-5 years, there are concerns
of possible increases in trade barriers, mainly in the EU,
which may hamper Thai exports. For instance, the EU recently
reclassified prepared chicken products in its harmonized custom
codes. Thus far, Thailand exports uncooked chicken meat products
under the 'salted item' category (by mixing some salt in their
chicken products) to enjoy the lower tariff of 15.4 percent,
instead of paying the US$ 1,000/ton tariff for unsalted chicken
meat. However, under the new definitions, salted chicken must
contain not less than 2.0 percent salt and be thoroughly marinated.
According to trade sources, these conditions would make the
product impractical for regular uses, and it would definitely
be difficult for Thai packers to export uncooked chicken meat
under a 'salted item' category.
Total broiler meat exports are forecast
to increase 5 percent in 2003 to 440,000 tons, of which about
300,000 tons would belong to uncooked products, while the
balance would go into cooked products. Trade sources believe
that a sharp reduction in exports in the second half of 2002
(Jul-Dec) may lead total broiler meat exports in 2002 to drop
to 420,000 tons, from 438,000 tons in 2001. Exports of both
uncooked products and cooked products are likely to fall to
300,000 tons and 120,000 tons, respectively.
Not only export volume would drop
in 2002, but also export prices. The C&F prices for skinless
boneless breast meat (SBB) shipped to the EU in January-August
were fairly stable at $1,800-1,900/ton, as opposed to about
$2,700-2,800/ton in the same period of 2001. Meanwhile, prices
for boneless leg meat (BL), mostly shipped to Japan, declined
enormously in 2002, from an average of $2,400-2,500/ton in
early 2002 to $1,300-1,400/ton currently.
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