Transcript
CAB CALLING l April-June, 2007
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Origin and Growth of the Thai Food Industry &
Thailand -The Kitchen of the World
E.V. Murray*
Lessons for India
Introduction
Till the 1970�s, Thailand did not figure
as a significant player in the
international agribusiness trade.
Traditionally an exporter of agricultural
produce confined to rice, pineapple and
sugar, today, Thailand is the only net
food exporter in Asia and has the
capacity to produce far more than its
population consumes. Thai food exports
exceed imports by a broad margin.
Over the past three decades, Thailand
has successfully utilized innovations in
agricultural research and technology to
develop a vibrant and dynamic
agricultural sector. Through technology
transfer and a combination of
perseverance and aggressive
determination on the part of the private
sector, the business of food
production for export has flourished.
Simultaneously, an economy with
sustained growth has resulted in a
strong domestic demand for processed
foods.
Today, Thailand is the world�s top
exporter of rice, canned pineapples,
pineapple juice and concentrate, and is
among the top ten exporters of seafood,
frozen shrimp and frozen chicken, with
agricultural exports accounting for
roughly 15% of total exports. Following
the 1997 financial and economic crises,
Thailand�s agricultural exports increased
significantly, particularly in rice, rubber,
shrimp, poultry, cassava, and corn,
demonstrating the capacity of the
agriculture sector to respond to an
otherwise critical situation. The
transformation of the Thai agri
economy made possible reduction of
poverty in rural areas of the country
from around 30% right upto the early
1980�s to fewer than 10% today, due to
a buoyant economy combined with
appropriately targeted poverty
alleviation initiatives of the
Government.
In this paper, which is based on
interaction with Government agencies,
enterprises and other actors in the sector
and study of literature on the subject,
an attempt is made to understand how
Thailand could transform its
agribusiness sector from a subsistence
crop oriented system to becoming a
global producer to feed the world
market and how we in India can learn
lesson from this experience.
* Member of Faculty, , College of Agricultural Banking, Reserve Bank of India, Pune
The inputs provided by the participants of the International Programme on Agribusiness in Thailand and Malaysia held during January, 2007 in thepreparation of the paper are gratefully acknowledged.
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Agriculture & Food Industryin Thailand
Agriculture and food industry is an
important sector in the economy of
Thailand. The country is the only net
food exporter in Asia and earns about
US$10 billion annually from food
manufacturing alone. Thailand�s fertile
soil and bountiful water resources have
contributed to its production surpluses.
Agricultural production is still a strong
base for the production of food for the
nation�s population and of raw materials
for food-processing industry. Thailand�s
location at the centre of Southeast Asia
makes it a natural export platform.
Exports account for half of the food &
beverage (F&B) industry�s output with
the balance consumed domestically. The
Thai food industry can be divided into
4 major categories: Primary
agricultural products, Livestock and
poultry, Fisheries and Processed foods.
Food processing is one of the country�s
biggest manufacturing sectors. About
61% of the processed F&B market in
Thailand is food products while
beverages make up a significant 39%.
The main types of processed foods
include fruits & vegetables, shrimp &
seafood, poultry products, rice grain &
cereal products, sugar & confectioneries
and juice & beverages.
Agricultural and Food Policy
A key reason for the healthy growth of the agricultural sector was the favorable
food and agricultural policy whose emphasis has been on strengthening
competitiveness of food and agricultural commodities in the world market on the
basis of efficient and sustainable natural resource utilization and strengthening
the capability of farmers as well as farmers� organizations to respond to dynamic
changes. The major elements of the strategy were as follows:
1. Increasing efficiency in input utilization to reduce the cost of production
through application of appropriate technology, research, and development
in agriculture as well as agro-industry.
2. Promoting production according to market demand.
3. Improving agricultural market infrastructure at all levels.
(A typical example being Tallad Tai market (Box1)).
4. Increasing capability for decision-making among farmers and farmer�s
organizations.
5. Increasing farmers� participation in agricultural policy planning.
6. Promoting sustainable agriculture through support of farmer mutual
learning process.
7. Strengthening capacity in increasing yield, sustainable agriculture,
networking on sustainable agriculture, and stronger community economy.
8. Establishing sustainable agricultural product standards.
9. Increasing farm credit and developing credit networking among farmer�s
organizations and entrepreneurs.
Applied Research in Agriculture
Conscious effort made by the Government Thailand and corporates in agribusiness
to work with agricultural and research institutions to orient research towards actual
and relevant requirements has resulted in increase in farm productivity and
enhancement in the quality of Thai food and agricultural products. Public and
private investment in agricultural research and development has resulted in
significant increase in yields and land productivity, enabling the expansion of trade
in Thai food and agricultural products in global markets.
The Tallad Thai, wholesale market is aThe Tallad Thai, wholesale market is aThe Tallad Thai, wholesale market is aThe Tallad Thai, wholesale market is aThe Tallad Thai, wholesale market is a
unique model of public-privateunique model of public-privateunique model of public-privateunique model of public-privateunique model of public-private
partnership, where fruit, vegetable andpartnership, where fruit, vegetable andpartnership, where fruit, vegetable andpartnership, where fruit, vegetable andpartnership, where fruit, vegetable and
other growers from surrounding 150 kmother growers from surrounding 150 kmother growers from surrounding 150 kmother growers from surrounding 150 kmother growers from surrounding 150 km
radius, bring their agri, dairy and marineradius, bring their agri, dairy and marineradius, bring their agri, dairy and marineradius, bring their agri, dairy and marineradius, bring their agri, dairy and marine
produce every day. The marketingproduce every day. The marketingproduce every day. The marketingproduce every day. The marketingproduce every day. The marketing
infrastructure created by the Govt. takesinfrastructure created by the Govt. takesinfrastructure created by the Govt. takesinfrastructure created by the Govt. takesinfrastructure created by the Govt. takes
care of the produce from the stage ofcare of the produce from the stage ofcare of the produce from the stage ofcare of the produce from the stage ofcare of the produce from the stage of
unloading to export by air/shipment afterunloading to export by air/shipment afterunloading to export by air/shipment afterunloading to export by air/shipment afterunloading to export by air/shipment after
value creation through processes ofvalue creation through processes ofvalue creation through processes ofvalue creation through processes ofvalue creation through processes of
washing, pre cooling, grading,washing, pre cooling, grading,washing, pre cooling, grading,washing, pre cooling, grading,washing, pre cooling, grading,
packaging, labeling and bar coding.packaging, labeling and bar coding.packaging, labeling and bar coding.packaging, labeling and bar coding.packaging, labeling and bar coding.
Box 1 : Tallad Thai Market
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Agricultural Credit
Credit has played a significant role supporting the
transformation of Thai Agriculture. The role of the Bank for
Agriculture and Agricultural Cooperatives (BAAC) of Thailand
in this direction is extraordinary. A state enterprise established
in 1966 at a time when very few Thai farmers had land title
documents which could be considered acceptable as security
for bank loans, BAAC adopted Joint Liability as the principal
basis of loan security, which has been at the heart of BAAC�s
operations ever since.
In terms of outreach, BAAC�s coverage of 5.53 million farm
households representing 95% of all Thai farm households is
unique in Asia and in the developing world as a whole.
Farmers are extended credit under the joint liability model
upto Thai Baht 150,000 without the requirement of
mortgaging land. The sheer portfolio of the bank of USD 11.7
billion, of which 85% is retail credit to individual farmers
reflects the important role played by BAAC in agricultural credit.
systematic and well designed strategy involving all the
players that made it possible.
Structure and size of export markets
Thailand is ranked as world�s 14th largest food exporter. Its
share in global food trade is only 0.2 percent in term of value
(only 1/7th of the United States, the worlds leading food
exporter). However, in terms of fishery products, Thailand is
the leading exporter of frozen, shrimp, and canned tuna; one
of the top five sugar exporters; and the main exporter for
tropical fruits and baby corn. In Asia, Thailand is the second
food exporter next to China while being the top exporter of
processed food. The table below shows the total value of food
export during the latest four years and indicates the growing
International demand for Thai food.
BOX 2: Joint Liability Groups
The basic requirement for availing BAAC
loans is that farmers after passing the
eligibility criteria of BAAC form themselves
into groups of people who know and trust
each other. These groups may vary in size
from 5 to 30, but in practice, most groups
consist of 12 to 15 farmers. Each year the
group members who want to borrow sign a
contract in which they accept liability not
only for their individual loan but also for
loans borrowed by other members of the
group. Hence the term �joint liability�. In
the rare case where joint liability borrowers
are proceeded against for non-repayment, the
whole group is involved in the legal action.
The services provided by BAAC extend beyond Savings and
Loans and are driven by a philosophy of �Develop the farmer
first and then follow by loan�. BAAC undertakes agricultural
extension activities in farming to reduce costs and improve
farm productivity.
Focus on Markets
The growth of the Thai economy has been tied directly to
growth in exports. It was not a mere accident that the economic
miracle that transformed the economy happened but it was a
Table 1: Thailand�s food export 2003-2006
Year Billion Thai Baht
2003 470.6
2004 507.0
2005 524.0
2006 571.7
Food exports represents more than three-quarters of Thai
agricultural and food export value, 17.2 percent of the total
export value from Thailand. The export value has been
increasing at an average rate of 9.2 percent annually despite
the baht devaluation. The most important food export is
fishery products with the major share of 43 percent in total
food export, followed by fruits and vegetables at 10 percent,
meat products, mainly poultry, at 8 percent, sugar and
confectionaries at 7 percent, animal feedstuffs at 5 percent,
and other food products (beverages, spices, dairy products,
coffee, tea and cocoa, fats and oils) at 7 percent. The main
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importing countries of agro-processed products from
Thailand are United States (37%), Japan (28%), Indonesia,
Australia, Canada and Singapore (5% each) followed by
Germany, Hong Kong and the Netherlands (4% each) and
Myanmar (3%). For agricultural products, the main
importing countries are Japan (32 percent), United States (19
percent) followed by China(9 percent), the Netherlands (8
percent), Singapore (7 percent), Hong Kong (7 percent),
Malaysia (6 percent), Taiwan (5 percent), Nigeria (4 percent)
and Korea (3 percent).
Domestic Market
The Thai domestic market stands equal in size to the export
market and in terms of purchasing power and quality is as
exacting as the export markets. The size of the Thai work
force now exceeds 34 million, with a majority of the workforce
under 30 years of age. Thais living in urban areas have become
brand conscious and their shopping pattern has moved away
from the traditional open-air wet markets to modern
supermarkets and shopping centers which offer convenience
and a wide selection of products. Changing eating habits of
Thais are greatly benefitting the restaurant sector in Thailand.
A continuous increase in the number of health-conscious
consumers is leading to higher demand for health and
functional food and drinks. Consumers are also eating out
more frequently. Thailand also being one of the top tourist
destinations, high growth in the number of hotels, resorts
and other tourist accommodation continues to lead to an
increase in the demand for food items.
Thailand features a growing retail industry which�s looking
for new and innovative food products. Upper and middle-
income groups in Thailand like to spend money on food,
especially during the holidays. Consumption of food products
peak during New Year, Christmas, Chinese New Year and
the Thai New Year seasons aided by gifts of food which are
becoming more and more common. Seafood, meats, nuts,
baking products, breakfast cereals, canned foods, dairy
products, fresh fruit and vegetables, frozen products, fruit
juice, and alcoholic beverages are the products with largest
demand.
To understand how the Thai domestic market is considered
by other developed nations, it is interesting to quote from a
trade advisory of the Canadian mission which states, �To
promote Canadian products in Thailand, Canadian firms
should emphasize their strengths in quality, innovation, and
safety. Canadian exporters must provide reliable product
availability, consistently supplying a quality product, technical
support, and information support. Credibility is extremely
important to both Thai importers and consumers. Your
business should match your export volume capabilities to the
sale volume capabilities of the retail channel.� This is testimony
to what the Thai domestic food market is.
Agro Processing
There are over 10,000 food processing companies in Thailand,
85 percent of them small enterprises and cottage industries.
The food processing industry covers a diverse range of product
segments. The maturity and technological development of
products and markets in each of the segments vary
considerably. The 15 percent that are medium and large
enterprises comprise 1,234 listed companies. They are cold
storage plants (20.8 percent), grain and tubers (17.8 percent),
frozen meat including poultry meat (10.9 percent), starch
(10.0 percent), canned fruit and vegetables (7.4 percent), fat
and oil (7.3 percent), sugar and honey (5.9 percent), coffee
and tea (4.9 percent), canned meat and seafood (3.9 percent),
snacks (3.2 percent) and others (8.3 percent).
Packaging
Thai food was traditionally packed in woven bamboo baskets,
plastic boxes and wooden boxes made of para-rubber wood.
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Since such packaging did not effectively protect the produce
during transport, there were tremendous losses. In addition,
these packages were uncompetitive in the world market, in
terms of appearance, ease of handling, use and disposal, and
strength properties. Since the 1980�s Thai processors have
realized the importance of improving the standards of
packaging for products sold both domestically and overseas
and are extensively using modern packing methods including
shrink wrap with food
grade plastic to minimize
contamination, improve
shelf life of food products
and enhance presentation
and visual appeal while at
the same time protecting
against spoilage and
deterioration in quality.
The Thai Packaging Centre, a non-profit state enterprise,
carries out research and development, testing and education
including information, consultancy, and training on
packaging to help improve and preserve the quality of
products, decrease losses during transportation, raise export
and up-grade packaging standards.
Food Safety
The extremely strict and stringent adoption of food hygiene,
quality and safety standards is the hallmark of the Thai food
industry. Over the last couple of years, the Thai government
has clearly emphasized food security and safety by promoting
�safe food products� for both domestic and international
markets. Thailand�s ambition to establish itself as the �Kitchen
of the World� has dramatically increased awareness about,
and focus on, safe
and durable
processed food and
therefore high levels
of safety and quality
assurances are being
implemented.
The Ministry of
Agriculture and
Cooperatives has
implemented a seal of quality assurance (Q mark) policy,
which is a �traceability system� with a national farmer
registration database for important commodities such as
shrimp, poultry, fruits etc. and an e-certificate for movement,
health and export of agricultural products. This helps track
produce from the farm to shop shelves and thereby limits the
damage from food incidents as well as improves the efficiency
of the food supply chain. Even the 9000 odd cottage and
small enterprises maintain the highest standards of quality
and hygiene which is the key to their competitiveness and
access to some of the world�s most demanding markets which
have stringent and exacting access standards. This has enabled
recognition of Thai products in the world markets. The larger
units follow the quality standards prescribed by the markets
they serve including, EUREGAP/CHINAGAP/JAPANGAP,
HACCP and BRC/IOC.
The National Bureau of Agricultural Commodity and Food
Standards develops standards for agricultural commodities
and food products, acts as an accreditation body by inspecting
and certifying product standards at farm level production and
processing stages and registering certifying bodies for
agricultural products and food products for export. It also
monitors and evaluates programmes on food safety. The
details of inspection and certification procedures as followed
in Thailand are provided in the flow charts in the Annexure.
Promoting Thai Cuisine
Thailand�s tourism industry has a unique history. During the
engagement of the United States in the Vietnam War, the
American Army used Thailand as a base for rest and
recuperation for their GIs. The presence of the US forces not
only led to an inflow of business into the economy but resulted
in the westernization of the culture in these centers. Long
after the conclusion of the war, with the western lifestyle being
desired by the people of other nations and considering the
general peaceful nature of the Thai people and the low cost of
living, Thailand began to attract leisure tourists in large
volumes from all around the globe. As the tourist influx
increased, along with Thai tourism, Thai Cuisine also gained
popularity.
According to various nutrition studies, traditional Thai food
and vegetables are high in nutritional value. Moreover,
traditional Thai diet consists of many herbs that are full of
nutrients that are good for health. Thai tradition states that
diet should be �principally rice and vegetables� and that
�protein should come from various types of fish�. Thus, �Thai
food is food for your health.�
Almost all Thai food is cooked with fresh ingredients, including
vegetables, poultry, pork, fish and some beef. Lime juice,
lemon grass and fresh coriander give the food its characteristic
tang, while liberal helpings of fresh chillies are used to add
some fire to many dishes. Other common seasonings include
black pepper, ginger, tamarind, and coconut milk which are
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often added to curries. Thailand�s cuisine is regarded by many people as one of
the best in the world. And, if variety is the spice of life, one can literally have a
different meal every day of the year.
Some of the popular dishes of Thailand are described below:
Popularizing Thai Cuisine Internationally - Overseas Thai
restaurants
Thai cuisine was not widely served outside of Thailand until the recent past.
Foreign visitors were first exposed to Thai food in the 1960s, the beginning of
the international tourism industry in Thailand. Today, there are 12,155 Thai
restaurants overseas, 49% of them in the United States and Canada; 20% in
Europe, 15% in Australia and New Zealand, 14% in Asia and 2% in other
countries. Thai cuisine is marketed as �Healthful and slimming,� and most
Thai restaurants in metropolitan cities today serve non-Thai customers.
Although many Thai restaurants are owned by non-Thais, the well-established
and highly recognized ones are run by Thai immigrants. They hire all Thai
wait staff and recruit experienced cooks from Thailand so that their restaurants
represent �real� Thai eating establishments. They also order ingredients (rice,
fish sauce, coconut milk, etc.) as well serving
dishes and decorative items and products
such as rattan chairs, and even menus from
Thailand.
Though Thai food has just begun to reach
a global clientele, it has rapidly gained
international popularity. According to a
survey on cuisine perception conducted by
the Kellogg School of Management of the
US, Thai food is ranked at number four;
after Italian, French, and Chinese, for the
food that first comes to the minds of
respondents when asked to name ethnic
cuisines. It is ranked number six behind
Italian, French, Japanese, Chinese, and
Indian for the question �what is your
favorite cuisine?� Thai food attracts a
Western audience as a healthy and non-
fattening diet.
The �Kitchen of the World�Project
The Thai government has promoted the
globalization of Thai cuisine by launching
the �Kitchen of the World� project, which
aims at promoting Thai food in the
international arena. The goal of the project
is to increase the number of Thai restaurants
overseas to 20,000 by 2008. The
government encourages Thai investors to
invest in Thai restaurants overseas and
provides support in the forms of training,
information, and finance. The government
hopes that the project will generate foreign
income not only from the sales of food and
service overseas but also from adding value
to agricultural and food products which
have been Thailand�s leading exports.
Gaengmus-sa-man Rich spicy curry with beef or chicken.
Gaeng kari gai Mild yellow curry with chicken.
Gaeng khiaw waan Sweet green curry with coconut milk and
shrimp, chicken, or beef.
Tom yam kung Spicy soup with lime juice, lemon grass,
mushroom and shrimp.
Tom khaa gai Soup with galangal root, chicken feet and
coconut milk.
Gaeng jeud Chilly free soup with vegetables and minced
pork.
Khao phat Fried rice with shrimp, beef, pork or chicken.
Khao man gai Sliced boiled chicken over marinated rice.
Khao na phet Roast duck over rice.
Kuay-tiaw nam Soup with rice noodles, meat and vegetables.
Laat naa Rice noodles, meat and vegetables in a thick
gravy.
Phad siyu Fried rice noodles with meat and vegetables
Sang kha-yaa Coconut custard.
maphraow
Kluay khaek Fried banana.
Mamuang khao Ripe mango with sticky rice in coconut cream.
niaw
BOX 3 : Popular Dishes of Thailand
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In promoting Thai cuisine internationally, the government
prioritizes standardization and quality. To control the standard
of Thai restaurants overseas, the government is awarding the
�Thai Select� label to qualified restaurants. Thai Airways
International and the Tourism Authority of Thailand are the
government�s agents in selecting qualified Thai restaurant
overseas. Thai Airways transports food items from Thailand
to Thai restaurants in destination countries to guarantee
freshness of food products.
Tourism and the Globalization of Thai cuisine
The internationalization of Thai food also promotes the Thai
tourism industry. Customers who dine in ethnic Thai
restaurants consume not only food but also the experience of
being and eating there. Thai restaurants in world cities are
decorated in ways that emphasize Thai culture and create
Thai atmosphere; they display Thai classical paintings,
sculptures, silk curtains, Buddha images, and pictures of
people and places in Thailand. Most Thai restaurants play
Thai music and serve food in blue and white wares. Some
restaurants serve food in wooden bowls and use banana
leaves to decorate their dishes while wait staff walk around
in traditional Thai attire. �Amazing Thailand� is the slogan
used to suggest that eating in a Thai restaurant offers the
same wonderful experience as traveling in Thailand.
Future Outlook
Thailand is the only net food exporter in Asia and naturally
wants to remain in this lucrative position. It is already
encountering competition from other countries such as
Vietnam and India in rice and shrimp, Brazil in chicken,
China in fruits and vegetables and Malaysia in halal food. If
Thailand is going to maintain and build on its markets, it
will have to live up to the very tight quality standards set
particularly by the large export markets of United States,
the European Union and Japan, but also increasingly by the
domestic market along with a trend towards environmental
packaging materials. The buoyancy of the domestic market
also presents tremendous opportunities with largest growth
segments is in the area of liquid products (including soft drinks,
beer, fruit juices). As lifestyles in Thailand change rapidly
towards the need for more convenience and ease in food
preparation, there is particularly growth potential in the areas
of canning, convenience and fast food, retail level bakeries,
snack foods and confectionary dairy products.
Thus, Thailand has not only made a mark for itself in the
food sector and while maintaining its dominance in the large
export markets like the US and European union, Thailand is
carefully and strategically making inroads into markets like
the former Soviet Republics (CIS countries), China and India.
In fact, latest indications are that Thailand is likely to enter
into a free trade agreement with India very soon. It is also
working with various countries to address the issues non-tariff
barriers to trade to promote exports. (Box 4). Thailand has
thus developed a strong foothold in food market credit and
also prepared itself to face a future that is going to be fiercely
competitive.
Produce Restriction Country
Mango, mangosteen VHT Treatment Japan
Durian Peeling/packaging Australia
Mangosteen VHT/Calyx removal Australia
Pineapple Decrowning Australia
Betel nut Fumigation Taiwan
6 fruits Irradiation U.S.A.
Pommelo Canker disease free The Netherlands
Box 4: Non-Tariff Barriers faced by ThaiBox 4: Non-Tariff Barriers faced by ThaiBox 4: Non-Tariff Barriers faced by ThaiBox 4: Non-Tariff Barriers faced by ThaiBox 4: Non-Tariff Barriers faced by Thai Agricultural ProduceAgricultural ProduceAgricultural ProduceAgricultural ProduceAgricultural Produce
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Potential and Opportunity for India
In India, 52% of total land is cultivable as against 11% in the
world. All 15 major climates of the world exist in India. There
are 20 agro-climatic regions and nearly 46 out of 60 soil types
in the country. Sunshine hours and day length are ideally
suited for round the year cultivation of crops. India is the
centre for biodiversity in plants, animals, insects, micro-
organism and accounts for 17% animal, 12% plants and 10%
fish genetic resources of the globe. In the live stock sector,
India has 16% of cattle, 57% of buffalo, 17% of goats and 5 %
of sheep population of the world. Agriculture contributes
18.5% to GDP, 15.2% of total exports and provides
employment to 58.4% of country�s work force.
India is the
l Second highest fruit and vegetable producer in the
world (134.5 million tones) with cold storage
facilities available only for 10% of the produce.
l Second highest producer of milk with a cold
storage capacity of 70,000 tonne.
l Fifth largest producer of eggs.
l Sixth largest producer of fish with harvesting
volumes of 5.2 million tones.
In spite of the vast natural resources and abundant agricultural
produce, India ranks below 10th in export of food products.
Estimates put processing levels in the fruits and vegetables
sector at 2%, meat and poultry at 2%, milk at 14%, fish at
4%, bulk meat de-boning at 21%. Currently, the food
processing sector, though in the nascent stage, constitutes 14%
of manufacturing GDP amounting to products value of Rs.2,
80,000 Crore. It employs 13 million persons and is supposed
to increase at an annual rate of 7%.
The Indian Food Processing Industry
The food processing industry has an important role to play in
linking the farmers to the final consumers in the domestic as
well as the international markets as can be seen from the
experience of Thailand. Food processing combined with
marketing has the potential of solving the basic problems of
agricultural surpluses, wastages, rural jobs, and better
remuneration to the growers. Agricultural produce, if
processed and marketed smartly, can make India a leading
food supplier of the world.
India with a population of 1.10 billion (growing at about 1.7
% per annum) provides a large and growing market for food
products. Food products are the single largest component of
private consumption expenditure, accounting for as much as
49% of the total spending. Furthermore, the upward mobility
of income classes and increasing need for convenience and
hygiene is driving demand for (a) perishables and non food
staples and (b) processed foods. Also, eating out is a booming
practice in urban India and processed foods are accepted as
alternative to the home cooked food because of the convenience
they offers. Also, with the globalization of trade and
availability of high speed logistics, food retailers in developed
countries are sourcing a year-round supply of fruits and
vegetables from developing countries. Thus, both for local
consumption as well for export there is a year round
opportunity for fruits and vegetables, meat and poultry
products and ready to eat processed foods.
The Food Supply Chain
India has a huge opportunity to become a leading global food
supplier if only it has the right marketing strategies and of
course agile, adaptive and efficient supply chain. India has
diversity in terms of its population with several religious
groups with different food habits and culture. This diversity
should be used to advantage to become the �Halal Food
Hub�, the �Organic food hub�, the �Vegetarian food hub�
the �Sea food hub� among others.
The potential and opportunities for India thus are boundless.
A forward looking policy and creation of conducive
environment for the growth of the sector can see the
transformation of Indian Agribusiness.
v Thailand is the only net food exporter in Asia.
v Thailand has a total area of 513,115 sq.km, 45% of which is used for agricultural production.
v Agricultural production employs about 60% of the country�s labor force but accounts for about 13% of GDP
only while the industrial sector which employs 12% of the 36 million labor force contributes 32% to the GDP.
Thai Food Industry�at a glance
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v Thailand�s fertile soil bountiful water resources have largely contributed to its production surpluses which
used to be exchanged with other commodities in the early days.
v Thailand is one of the world�s leading producers of rice, producing about 24 million tons and is one among the
world�s largest suppliers of sugar, tapioca and pineapple.
v Tropical fruits are abundant and currently, Thailand is the world�s leading supplier of longan, durian,
mangosteen and longkong.
v Thailand earns about US$10billion annually from food manufacturing alone.
v Food manufacturing started only in the 70�s but the country now ranks among the top ten exporters of the
following food commodities.
l World�s largest exporter of canned pineapple, pineapple juice and concentrates
l Second largest exporter of seafood (especially tuna)
l World�s largest exporter of frozen shrimps
l One of the top ten exporters of frozen chicken.
v In 2001, the food export of Thailand was worth 444.71 billion baht which was about 15.0% of the country�s
2.89 trillion baht exports.
v There are more than 9,000 factories in Thailand consisting of small-, medium-and large scale plants which
employ about 600,000 persons.
v Through technology transfer and a combination of perseverance and aggressive determination on the part of
the private entrepreneurs, the business of food production for exports has prospered.
v The development of the food industry is closely associated with the country�s entry to international trade.
v 1960-70: Thailand substituted most of its imported products with its product surpluses. Technology was
imported from Taiwan and Japan.
v 1970-80: It was only at this stage that the country started to earn from the processed products exports. Products
were initially targeted for local consumption and surpluses were exported. Lacking in experience in bulk
production and marketing, producers felt the need to improve their technical know-how to improve product
quality to international standards.
v 1980-90: This stage was characterized by its rapid pace of development with the country�s export registering
a 26% growth rate in 1990s, accounted for mostly by frozen and chilled commodities.
v 1990 onwards: The present stage is towards high competition in the world markets. Great concern is now
placed on hygiene and sanitation of production, food safety, wholesomeness, production costs, value-added,
standards, environment and regulations.
Stages in Development of the Thai Food Industry
CAB CALLING l April-June, 2007
26
Select References
1. Agriculture and Agri-Food Canada (2004) Thailand�Agri-Food Country Profile July 2004
2. BAAC experience with joint liability lending � virtual library on microfinance.
3. Board of Investment, Thailand (2003) Agriculture and Agro Industry in Thailand October 2003.
4. CAB (2007) Agro Processing and Agriculture Business Sector in Thailand & Malaysia - Report of the participants of theInternational Programme � January 19-31, 2007.
5. Dr.S.Venkatesh, Suman Neupane and Mithilesh Agarwal AIT, SOM (2003) Case on Food and Beverage Industry in Thailand.
6. Isabelle Delforge (2004) Thailand: the World�s Kitchen.
7. Mc Kinsey Quarterly (1997) India�s Sleeping Giant-Food.
8. N.Vishwanadhan (2006) Can India be the food basket of the world? Working Paper, Indian School of Business.
9. National Food Institute, Thailand website http: www.nfi.or.th.
10. Prakoran Virakul, (2007) Presentation at the Seminar a �Latest developments and challenges in Food Safety� APEC FoodSafety Cooperation Form 2007, 3 April 2007, Hunter Valley, Australia.
11. Ruangra Tokrisna (2003) Thailand, Pacific Food System outlook, 2002-03.
12. Royal Danish Embassy, Bangkok (2006) Danish Trade Council. Overview of the market for Food Processing and PackagingMachines in Thailand.
13. Supacha Sathakorn (2004)�How can public bank contribute in rural areas� APRACA Regional Symposium October 2004,Tehran.
14. Sirijit Sunanta (2005) The Globalization of Thai Cuisine, Paper presented at the Canadian Council for Southeast Asian StudiesConference, York University, Toronto, October 14-16, 2006.
15. Vision, Strategy and Action Plan for Food Processing Industries Vol.I & II, Rabobank India for Ministry of food ProcessingIndustries, Govt. of India December 2004. (http: mofpi.nic.in/visdoc.htm)
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