CLMV could steal share of Thai farm exports
THAILAND’S agricultural products could lose market share to Cambodia, Laos, Myanmar and Vietnam (CLMV) under the Asean Economic Community, despite the value of the Kingdom’s agricultural exports to Asean countries increasing this year, according to a study by the University of the Thai Chamber of Commerce.
In the first year after the AEC came into effect on December 31, 2015, Thailand’s exports of agricultural products to the other nine Asean countries increased in value by 10.4 per cent year on year to Bt321.54 billion. Average export value in the 2010-14 period was Bt261.45 billion.
“The export of Thai agricultural products to Asean countries increased continuously this last year under seamless trade,” said Aat Pisanwanich, director of the UTCC 's Centre for International Trade Studies.
“However, export to CLMV countries will shrink, as those countries have higher potential for growing crops. To benefit from rising agricultural production in CLMV, Thai enterprises need to expand their investment into processed agricultural products in those countries for re-export to other Asean countries and the world market.”
In the UTCC’s survey of 1,000 Thai exporters of raw and processes agricultural products, 59.2 per cent of respondents said they could benefit from the AEC. More than 95.2 per cent of exporters of raw and processed seafood said they had benefited from the AEC, followed by exporters of maize and soybean products.
Respondents predicted that Thailand would export more agricultural goods to Asean markets by an average of 15 per cent a year. Expected export value of raw and processed agricultural products this year is Bt369.78 billion.
However, rice, mango and cassava exporters said they had not benefited from the AEC.
The reasons that many exporters have enjoyed the AEC are lower tariffs and better trade facilitation, while Asean includes high-potential export markets with well-developed logistics and transportation systems.
However, those exporters who did not benefit from the AEC blamed complicated non-tariff barriers, higher costs of production in Thailand compared with other Asean countries, and the fact that Asean is not a major export market for their particular products.
Aat said the Thai agricultural goods that will lose opportunities in Asean were rice, rubber, coffee, cassava, coconut and mango, while products that would enjoy higher exports were maize, soybean, banana, livestock products, and seafood.
