The Thai processed and frozen chicken export industry has met substantial challenges over the last 2 decades but thanks to hard work in recent years from business enterprise and government, it has streamlined to meet the increased demands of international markets and updated supply chains to meet animal welfare and health and safety standards.
Statistics Suggest A Thriving Industry
In 2017, the USA, Brazil and China accounted for half of the 90 million tonnes of chicken produced annually worldwide. Statistics show that in 2017 532,000 tonnes of chicken was exported from Thailand. This had a value of $2.25 billion. Over recent years there has been a year on year growth. (Value: 3% and tonnes: 11%).
Exports fall into 2 main classes: (1) frozen chicken – which includes, whole, boned and prepared and salted chicken and (2) processed chicken which in short has either been cooked or flavoured in some way. Thailand is responsible for 1.7% of global frozen chicken exports and the market leader in providing 27.8% of all global exports of processed chicken by weight. – followed by China, Brazil Germany and the Netherlands.
The top 7 operators in Thailand (who provide 50% of the output) are Charoen Pokphand Foods, Betagro, Sahafarms, Cargill, Thaifoods, GFPT, and Laemthong industries. On top of these are singular contract farmers and independent concerns who like the main players their output is sent to Thai slaughterhouses.
Reasons for Continued Growth
So what is behind this recent growth within the industry? How has the industry met the challenges? The continuing relaxation of restrictions from overseas trading partners on the import of Thai frozen chicken has had a marked effect on exports. Since 2004 Thai exports were banned in many countries due mainly to the highly pathogenic Avian Influenza (HPAI) which was rife in Thailand. In order to control the virus – and especially over the last 5 years – the Thai food industry has seen some highly innovative technological improvements.
Vertical Integration
Most of all, Thailand has moved away from contract farming in the poultry sector (a great deal safer) and looked towards vertical integration. There have been no reports of the virus in Thailand now since 2006 (the first report was in 2004) so the government is keen to keep any outbreak securely at bay. Permanent Secretary for Public Health, Dr Narong Sahamethapat has stated that the greatest threat is when the Avian Flu is spread from neighbouring countries and provinces and therefore extra vigilance in terms of border control needs to be a constant priority
Of course, Avian Flu is not just peculiar to Thailand – it has caused a global crisis for businesses in the food industry across the globe. For many countries in the world, unfortunately, Avian Flu still remains an issue and exports are still restricted. This will present an opportunity for Thailand to increase its exports of frozen and processed chicken.
Focus on The Processed Chicken Market
Since the outbreak of Avian Flu the exports of raw chicken was cut drastically by participating countries importing Thai chicken. In order to offset this deficit, export focus shifted to processed chicken. This sector is now greatly strengthened and has remained highly effective ever since.
Innovative Cooling Systems
In addition, the development of (EVAP’s) evaporative cooling systems enhanced the frozen and processed chicken supply chain – especially for contract farmers. To match this of course there has been an enormous growth in the last 10 years in fast food and purchases for household consumption.
Future Growth
Overall Thailand currently sits 10th in the world in the rankings of global broiler producers. Outputting an estimated 2.1 million tonnes per year. This can also be seen as 2% of the world output. Two thirds of Thailand chicken output is consumed by the domestic market. Of the remaining 40% the majority is exported through frozen and processed chicken industries.
The figures for 2020 look very good for Thai exports in the chicken industry. However, it is likely that percentage growth is unlikely to hit the same highs previously seen due to the fact that previous years took into account the relaxation of trade restrictions following the end of the Avian Flu. Another positive outlook is Thailand has new markets for the coming years in the Middle East, Africa and china as the fast food industry continues to expand.
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