Southeast Asia radius

Thailand’s neighbours leapfrog Japan to become biggest export markets

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock

Related tags: Asean, Japan

Strong demand from other Asean countries should see 8% growth for Thai agriculture and food exports this year.

That amounts to some THB900bn (US$27bn), of which sales to Cambodia, Laos, Myanmar and Vietnam accounted for 15.2% last year.

That was the first time ever that exports to these neighbouring countries exceeded those to traditionally first-placed Japan, which took in just under 14% in 2016, according to UBM Asia, which analysed the data.

Exports to other Asean nations stood at 13.2%, followed by Europe, Africa and China, with 8% of sales.

"Booming demand from Asean, and especially from Cambodia, Laos, Myanmar and Vietnam, is behind the 8% increase​," said UBM’s Rungphech Rose Chitanuwat. 

Thai baked wafers, fruit drinks, sauces, dried fruits and other snacks in particular have become popular in these countries, said Ms Rungphech. 

Yet there is still room for growth. Chicken meat should grow rapidly after South Korea began importing the product from Thailand. 

Shrimp products, too, are in high demand in America and Japan, while canned corn is becoming increasingly popular among middle- to low-income segments in Japan, she said. 

Thailand was the world's 13th largest instant food exporter in 2016, but has yet to develop its full potential in sectors like reaction flavouring and seasoning powders, which can be partially produced from food manufacturers’ byproducts. 

Other than start-ups and SMEs, 30 Thai companies manufacture ingredients for export. 

Rungphech said consumers will continue to demand natural and organic products, driven by concerns for localisation, transparency and traceability. 

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Olam completes US$400m debt refinancing

Singapore-based Olam International, the multinational agri-commodity trader, has secured a revolving credit facility worth US$400m.

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The Temasek-owned company said it will use proceeds from the facility to refinance its existing syndicated/ bilateral bank loans, along with those of subsidiaries. 

The facility consists of three tranches: one worth US$160m over 364 days; another worth US$120m over two years; and a third for US$120m over three. 

We are pleased to have secured this refinancing, which extends our debt maturity profile at a competitive cost​,” said Jayant Parande, Olam’s president of treasury and investor relations. 

Seed company opens micro veggie gardens at future-food institute

East-West Seed has begun collaborating with the Food and Nutrition Research Institute in the Philippines to develop improved varieties of vegetables that can be grown in home gardens.

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The seed major has established a vegetable garden at the institute’s campus in Taguig City, where harvests of eggplant, okra, tomatoes and ampalaya have been showing promise.

The purpose of the exercise has been to show that technology can be used to make even small gardens worthwhile. Plans are underway to expand the project to the institute’s regional offices and those of the Department of Science and Technology.

Officials and food scientists have been trying to wean Filipinos onto more vegetables and reduce the consumption of rice, the country’s biggest staple.

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The institute has also devised noodles enriched with pumpkin, polvoron fortified with vegetables and milk, and other fortified rices.

Related topics: Markets, Industry growth, South East Asia

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