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Covid, stronger baht pull Thailand down in world food market

Covid, stronger baht pull Thailand down in world food market

THURSDAY, February 18, 2021
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Thailand has dropped to the 13th place globally in food exports owing to dropping demand due to the pandemic, appreciation of the baht, shortage of shipping containers and rising cost of logistics.

Anong Paijitprapapon, president of the National Food Institute, said on Thursday that Thailand’s food manufacturing sector contracted 6.5 per cent in 2020 due to a drop in both local consumption and exports. Also contributing to this drop was a shortage in raw materials, especially cassava, sugar and pineapple.

The export of food products last year stood at Bt980.7 billion, or 4.1 per cent less compared to the previous year. Meanwhile, Thailand’s global market share dropped 2.32 per cent from 2.49 per cent in 2019, which pulled it down in global ranking from 11 to 13.

Last year, export to just three markets moved in a positive territory, namely China accounting for Bt179.76 billion, the United States Bt118.71 billion and Oceania Bt33.05 billion.

The Thai food industry is highly dependent on export markets, especially China and CLMV (Cambodia, Laos, Myanmar and Vietnam), which account for 32.2 per cent of Thai exports, rising 12.1 per cent over the past decade. Export from Thailand to China and CLMV countries has risen at an average of 19.6 and 8.9 per cent respectively.

In comparison, Thailand is depending less on developed countries such as Japan, US, the European Union and United Kingdom. These four markets now account for 32.4 per cent of Thai exports, down from 42.4 per cent 10 years ago.

Thailand’s export to the EU and the UK has dropped at an average of 3.1 per cent and 0.9 per cent per year respectively, while to Japan and the US, it has risen marginally by 1.4 per cent and 0.5 per cent, respectively.

Apart from the pandemic, Thailand is also suffering from currency appreciation, shortage of shipping containers and rising cost of logistics.

In 2020, the export of processed food products came in at Bt581.53 billion, down by 5.6 per cent compared to the previous year, while the export of raw agricultural products stood at Bt399.15 billion, dropping 2 per cent from the previous year.

As for Thai food exports in 2021, it is projected to come in at Bt1.05 trillion, marking a rise of 7.1 per cent mainly due to a rise in demand once economies start recovering, rising food prices and measures to prevent contamination, which will boost confidence in Thai products.