Local food export industry fears tighter restrictions
The United States and European Union could impose tighter
restrictions on the import of food products as part of plans to prevent
terrorist attacks in the wake of the Iraq war, which in turn could deal a
blow to Thai producers.
Phaiboon Pholsuwanna, acting president of the Thai
Association of Frozen Food Industries, said that even though the Middle East
was not a major market for Thai frozen food, the local industry could be
affected as major importers such as the United States and the European Union
could exercise greater caution in importing goods in order to protect
against terrorist attacks.
“As far as I can make out from conversations with Thai
exporters, it appears that after the war large nations such as the US and
the EU will be on the look-out for terrorism in various forms. Fewer people
in large cities will leave their homes and travel, which in turn will have
an impact on prawns, chicken and fish from Thailand, as fewer people will
eat out in restaurants and hotels,” Phaiboon said.
Phaiboon admitted it is too early to forecast the state
of the market for Thai food products in the US after the war. However
figures coming in from the US and Japan for the first two months of this
year showed continuous growth, particularly exports of Thai prawns, which
grew by 22 percent.
However, despite the easing of EU restrictions on Thai
prawn products, other categories of Thai exports to the EU remain relatively
TCC to follow central bank in new economic forecasts
The Thai Chamber of Commerce (TCC) is set to revise its
economic forecasts to take into account the Iraqi war and severe acute
respiratory syndrome (SARS); while remaining optimistic that the combined
effects of the two factors will not slow down the economy by more than 0.8
percent, and that overall growth should nudge towards earlier predictions of
Thanawat Pholwichai, director of the University of the
Thai Chamber of Commerce’s Economic Forecasting Center, said that the
university was currently revising its economic forecasts for 2003. He said
the combined effects of the Iraqi war and SARS will slow economic growth in
the first and second quarters of the year.
The TCC expressed confidence that if both the war in Iraq
and SARS blew over quickly, and the economy continues to be stimulated it
could bounce back.
Earlier this month the Bank of Thailand (BOT) also hinted
that it might revise its economic forecasts at the end of April.
Thanawat said, “Overall growth for the year could
increase if the government issues a further round of economic stimulus
measures. Waning consumer confidence is already sending out warning signals,
even though consumer confidence remains positive.”
Trade with China and India could reduce blow from war and SARS
In a recently published report, the Bank Thai’s Office
of Research and Planning urged Thailand to expedite trade negotiations with
India and China, saying that increased trade with both countries would help
compensate Thailand for the loss of tourism earnings due to the combined
impact of the war in Iraq and Severe Acute Respiratory Syndrome.
Analysts say increased trade with China would boost
Thailand’s market presence there, particularly in terms of rice, rubber,
cassava, sugar and fisheries export.
Thailand has an advantage compared to other markets in
the ASEAN region due to its ability to modify its marketing strategies prior
to the establishment of an ASEAN-China Free Trade Area.
The report also suggested that Thailand should push
exports to India, as at present its market presence in India was relatively
low due to India’s imposition of high import tariffs and quotas on the
quantity and type of imports allowed in.
Thai industry holds out hope for 70% production capacity after war ends
Thailand is likely to see a rapid expansion in exports
after the end of the war in Iraq, pushing up production capacity by the end
of the year. Praphat Phothiworakhun, president of the Industrial Council of
Thailand, expressed confidence that average industrial production capacity
would reach 70 percent this year, up from 63 percent last year.
“I’m confident that after the war the world economy
will continue to grow, as next year there will be Presidential elections in
the US, which means that President George W. Bush is unlikely to let the US
economy slide. Consumption will probably be boosted, which will improve the
US economy, the world’s largest consumer. The world economy will grow,
which in turn will boost Thailand’s exports,” Praphat said.
During the Iraq war the electronic goods industry have
seen a drop in exports. However other industries such as food saw exports
“Moreover, government negotiations to establish Free
Trade Areas with countries including China, India, Bahrain, Australia and
Japan should give a further kick to export expansion,” Praphat stressed.