Thailand's food safety advantage
set to win Japanese market from China
By Jon FernquestBoth China and Vietnam produce food at lower cost than Thailand.
On the other hand, Thailand's food security and food safety standards
are better developed than either one of these countries.Thailand's well-developed food safety standards could translate into a competitive advantage for Thai food exports.
A series of food safety incidents in China over the last few years has raised serious doubts about the safety of Chinese food exports.
In contrast. over the past fifteen years Thailand's food industry has gradually adopted from the west state-of-the-art manufacturing practices, environmental controls, and the so-called Hazard Analysis Critical Control Points (HACCP) approach to food safety.
Radio Frequency Identification (RFID) tags on food products such as packaged pork bought in supermarkets now allow each item sold to be traced back to its origins to determine where contamination occured in the food processing supply chain.
(See photo on right of food processing workers in a factory clothed in safety outfits)
food security -
makign sure the country has enough food to eat
a standard - an acceptable level of quality or achievement
food safety standards - levels of food quality that ensure that the food is safe
translates into - causes
competitive advantage - better able to sell products compared to other countries
food safety incidents - when there is contamination (see below) and people are harmed by eating some food
doubts - feel uncretain and question whether something is really true
raised serious doubts about - made you really question whether it was true
Radio Frequency Identification (RFID) - a technology where tags are attached to an item being manufactured or processed and information about the item is added to the tag as it is processed, this allows you to go backwards and trace the sequence of steps that the item went through to find the cause of a problem identified later (See Wikipedia)
contamination - made dirty and dangerous to use or eat after exposure to dirt, germs, chermicals, or radiation
food processing - the methods and techniques used to transform raw ingredients into food for consumption by humans or animals (See Wikipedia)
supply chain - all the processes and companies involved in making and selling a final product, includes raw materials and intermediate parts, manufacturing, storing, transporting and selling the product to the customer
Hazard Analysis Critical Control Points (HACCP) - a system for food safety used by the US government:
a standard - an acceptable level of quality or achievement
food safety standards - levels of food quality that ensure that the food is safe
translates into - causes
competitive advantage - better able to sell products compared to other countries
food safety incidents - when there is contamination (see below) and people are harmed by eating some food
doubts - feel uncretain and question whether something is really true
raised serious doubts about - made you really question whether it was true
Radio Frequency Identification (RFID) - a technology where tags are attached to an item being manufactured or processed and information about the item is added to the tag as it is processed, this allows you to go backwards and trace the sequence of steps that the item went through to find the cause of a problem identified later (See Wikipedia)
contamination - made dirty and dangerous to use or eat after exposure to dirt, germs, chermicals, or radiation
food processing - the methods and techniques used to transform raw ingredients into food for consumption by humans or animals (See Wikipedia)
supply chain - all the processes and companies involved in making and selling a final product, includes raw materials and intermediate parts, manufacturing, storing, transporting and selling the product to the customer
Hazard Analysis Critical Control Points (HACCP) - a system for food safety used by the US government:
"...a
systematic preventive approach to food safety and pharmaceutical safety
that addresses physical, chemical, and biological hazards as a means of
prevention rather than finished product inspection. HACCP is used in
the food industry to identify potential food safety hazards, so that
key actions, known as Critical Control Points (CCP's) can be taken to
reduce or eliminate the risk of the hazards being realized. The system
is used at all stages of food production and preparation processes
including packaging, distribution, etc. The Food and Drug
Administration (FDA) and the United States Department of Agriculture
(USDA) use mandatory juice, seafood, meat and poultry HACCP programs as
an effective approach to food safety and protecting public health..."
(See Wikipedia)
Japan searches for quality
The Japanese government and Japanese consumers are known worldwide for their concern about quality and quality control. This concern about quality also applies to imported foods which represent 60% of all food consumption in Japan. Up to now, 80% of Japan's food imports had come from China. With China's continued food safety problems this looks like it will change.Large Japanese supermarket chains (200-300 branches) are in talks with Thai producers on increasing Thai food exports to Japan. To keep prices competitive with China and Vietnam, Thai producers are also planning to cut logistics costs as much as possible. Recent baht depreciation should also work in favour of Thai exporters.
Thai food exports to Japan look set to grow at least 10% next year. The world economic downturn is expected to cause an overall fall in Thailand's food exports from 800 billion baht this year to 760 billion baht next year. Because of food's essential nature even if there is a recession, the fall in food exports looks to be less than other export goods such as luxury products, textiles, garments, electrical appliances, high technology, and automobiles.
The percentage of exports to Japan in total Thai food exports is expected to increase to between 15% and 16% of total food shipments from an estimated 14% this year. The fraction of all food exports going to the US and Europe remains at 14%-15% of total food exports.
quality control - a
series of checks and control measures that ensure that a uniform
quality food product is produced
looks like... - will probably...
supermarket chains - a company that owns many large stores in different locations selling a variety of food
logistics costs - costs of transporting, storing, and tracking goods
baht depreciation - when the value of the baht falls (relative to other currencies)
work in favour of - help
essential - needed for survival or success
food's essential nature - food is necessary for life, everyone has to eat
garments - clothes
electrical appliances - machines used for household tasks
looks like... - will probably...
supermarket chains - a company that owns many large stores in different locations selling a variety of food
logistics costs - costs of transporting, storing, and tracking goods
baht depreciation - when the value of the baht falls (relative to other currencies)
work in favour of - help
essential - needed for survival or success
food's essential nature - food is necessary for life, everyone has to eat
garments - clothes
electrical appliances - machines used for household tasks
Thai exports to Japan
Thailand's highest volume food exports to Japan include finished food products, shrimp, cooked chicken, vegetables and fruits, seafood and fish.All of these products enjoy lower tariffs under the Japan-Thailand Economic Partnership Agreement (JTEPA).
Only exporters of processed chicken and seafood products have directly benefited so far from the Japan-Thailand free trade agreement. Thai meat and seafood exports to Japan rose 36% in the first nine months of 2008. Thai meat and seafood exporters are also the group that sought most eagerly to take advantage of the agreement when it was signed last year. A full 79% of processed shrimp exporters and 80% of black tiger prawn exporters applied for benefits under the agreement.
Thai farm products that already enjoyed trade benefits with Japan had recorded a 24% increase in exports since the agreement was signed. Since these products already enjoyed trade benefits, the rise is not likely to be due to the new Thai-Japan free trade agreement.
(Source #1: Bangkok Post, business, 20-11-08, Thai-Japan food exports set to expand: Poor Chinese safety standards cause shift, PHUSADEE ARUNMAS, link)
(Source #2: Bangkok Post, business, 05-11-08, Few big winners so far from Japan trade pact, ACHARA ASHAYAGACHAT, link)
