Thailand - The Kitchen of The world

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


24

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


25

Annexure


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)

Thailand - The Kitchen of The world

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