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Institute sees turnaround in food exports



The value of the Kingdom's food exports is forecast to increase by 3.5 per cent in the fourth quarter over the same period a year ago, thanks to the expected recovery of the world economy in that period, the National Food Institute said yesterday.

"Major food importing countries such as the US, Japan and countries in Europe are expected to resume importing food in the last quarter of the year after their economies improve from the first half," said NFI executive director Yuthasak Supasorn.

The value of the Kingdom's food exports contracted 7.6 per cent year on year to Bt351.12 billion in the first half of the year, due to lower demand against higher supplies.

Yuthasak said the supply of agricultural products rose due to a sharp spike in prices.

Despite the lower value in general, Thailand's processed food benefited from growing concerns about the quality of food from China. The export value for processed foods grew 4.8 per cent year on year.

"The overall situation should improve in the latter half, when the volume of food exports should rise 2.6 per cent - but their value will continue to drop at the 6.9-per-cent rate. Throughout this year, the value of food exports is expected to drop 7.2 per cent to Bt722 billion," Yuthasak said.

He said the type-A (H1N1) pandemic should not hurt Thai food exports, due to Thailand's production quality, which has won global recognition.

The average production capacity of the food industry in the first half of 2009 was 51.5 per cent, lower than the 53.8 per cent in the same period the year before.

Yuthasak said the institute forecast food-export value in the third quarter this year to continue to decline compared with its good performance in the same quarter last year.

However, if food exports are figured in terms of volume, which the NFI calls "real food export performance", it is expected to grow by 1.5 per cent from last year.

Kasikorn Research Centre recently forecast a figure of Bt744 billion for the value of food exports this year, a fall of 3.8 per cent from 2008.

World food demand in the first half declined, in line with the economic downturn. Thai food manufacturers had to reduce their production capacity to meet the world situation, added Yuthasak.

He said ready-to-eat food was the only segment that grew in the first half from the same period last year. The export value of this segment was Bt155.12 billion, increasing by 4.8 per cent from Bt148.02 billion year on year. Animal foods and raw-material foods experienced sharp drops from last year, with declines of 22.7 per cent and 20.1 per cent, respectively.

Yuthasak said the products that would be key drivers of the country's exports in the second half of the year were shrimp, chicken, sugar, fruit juices and canned fish.



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