Thai food exports have a promising outlook this year, with shipments forecast to eke out growth of 2.1% to 1.5 trillion baht despite economic uncertainty in developed markets, inflationary pressure, foreign exchange volatility, rising production costs and drought.
According to Anong Paijitprapaporn, director of the National Food Institute, the main supporting factors include the government's policies to revive the economy, the country's reopening following the pandemic, a shortage of food throughout the supply chain, concerns about food safety, and the high quality and safety of Thai food products.
China's reopening and the lifting of zero-Covid measures on the mainland also increased trade volume, reduced transport time and made it more convenient for products with markets in southern China, such as frozen chicken, said Ms Anong.
However, she said there are still many factors that may hamper exports, such as higher production costs attributed to rising energy prices; concerns about volatile exchange rates; worries about the US economy and banking problems that affect consumer purchasing power and confidence; and the continuing weakness of the yen, denting the purchasing power of Japanese consumers and that nation's ability to import.
Inflationary pressures are also expected to continue to limit consumer purchasing power, especially in major import markets such as the US, Europe and Japan.
In addition, the production of key food items used as raw materials, such as pineapple, cassava, shrimp and tuna, may decrease, said Ms Anong.
According to a joint report by the Thai Chamber of Commerce, the Federation of Thai Industries and the National Food Institute, food exports were valued at 346 billion baht in the first quarter this year, up by 10% year-on-year.
The growth was largely attributed to increasing demand for food products in the global market, concerns about food security, the Ukraine war and extreme weather conditions resulting from the El Niño phenomenon.
The lifting of China's strict zero-Covid restrictions also helped support the expansion of Thai food exports.
Products that recorded export expansion in the first quarter included sugar, rice, chicken and fresh fruit.
Sugar exports were worth 40.3 billion baht, increasing by 37.3% because many countries were concerned about food shortages and stocked up, according to the report.
Moreover, major exporter countries such as India extended sugar export restrictions for another year, providing an opportunity for Thailand.
Rice shipments were worth 38.1 billion baht, rising by 29.2% because of limited production by major exporters and concerns about food shortages that led to increased stockpiling by rice-consuming countries.
Chicken exports tallied 36.2 billion baht, increasing by 14.7%, with fresh chilled chicken the main product exported to China, while processed chicken products expanded well in the UK and the EU.
Exports of fresh fruit totalled 27.5 billion baht, up by 59.4%, with the lion's share going to China, with a significant increase after the country eased Covid restrictions.
Ms Anong predicted exports of food products would contract in the second quarter from a high base the previous year. However, they are expected to recover in the second half of the year.
In the first half, exports of food products are expected to tally 734 billion baht, down 1% year-on-year.
The volume is forecast to expand by 5.2% in the second half, with a total export value of 766 billion baht.
