Three major Thai farm goods - coffee beans, rice and palm oil - will lose their competitiveness under the Asean Economic Community if farmers and the government neglect to increase productivity and cut production costs, researchers warned yesterday.
A study by the University of the Thai Chamber of Commerce's International Trade Study Centre showed those three goods stood to lose a combined US$60 million (Bt2 billion) to other Asean countries after liberalisation once the Asea Free Trade Agreement (Afta) comes into effect next year.
Cenyre director Art Pisanwanich said present inefficiency in productivity, logistics and cost management would hurt the competitiveness of Thai farm products under Afta.
"Although overall exports of major farm goods will increase following trade liberalisation, the market share of Thai exports in other Asean countries will decrease, because Thailand is inefficient when it comes to productivity and cost management," said Aat.
Thai farmers must urgently develop their productivity, in order to ensure their competitiveness within Asean. They must also decrease costs for production and lofistics and diversify from commodities to high-value-added goods.
The government should draw up a strategy to strengthen agricultural practices - one that not only promotes higher prices via intervention schemes, but also development of productivity.
Aat said that local rice productivity was the lowest among Asean countries. For example, in this year's crop, the yield per rai for rice is 452 kilograms in Thailand, 579kh in Laos and Malaysia, 611kg in the Philippines, 787kg in Indonesia and 792kg in Vietnam.
Local coffee beans will be hardest hit by Vietnam. Thailand's Asean market share of the product will decline 0.1 per cent, or US$200,000 (Bt6.68 million), to Vietnam's benefit between next year and 2015.
Thailand's export market share in Asean for coffee beans is now 2.8 per cent, while Vietnam commands 61.1 per cent.
Rice, Thailand's major export crop, will also lose to Vietnam. About 0.5 per cent of the market share, worth $13 million, will pass to that country. For palm oil, 2.6 per cent of the market share, worth $46 million, will go to Malaysia.
At president, Thai rice exports crop, will also lose to Vietnam. About 0.5 per cent of the market share, worth $13 million, will pass to that country. For palm oil, 2.6 per cent of the market share, worth $46 million, will go to Malaysia.
At present, Thai rice exports have a 28.9-per-cent market share within Asean, while Vietnam enjoys 71.1 per cent. Thai palm oil has a 6.4-per-cent market share in Asean, while Malaysia commands 34.4 per cent.
Tapioca will be the only major Thai agricultural export to enjoy a higher market share within Asean, increasing 0.1 per cent, or $5,000.
Import tariffs on rice and palm oil, which are 5 per cent now, will be elimated next year. Thailand's tariff on coffee beans will be reduced from 30 per cent to 20 per cent next year and then 5 per cent in 2015, because the Kingdom classifies coffee beans as a sensitive product.
Chainant Ukosakul, vice chairman of the unversity's committee on trade rules and international trade, questioned whether Thailand was ready for free trade in Asean, saying the government had no sustainable or integrated plans for developing agriculture.
He urged the government to draw up plans to develop the various farm sectors and improve efficiency in custom procedures, in order to serve trade liberalisation under the AEC next year.
Tuesday, October 20, 2009
Friday, October 2, 2009
B3bn loans sought for equipment
The Office of the Cane and Sugar Board is seeking cabinet approval for 3 billion baht of loans to help cane farmers buy mechanised cane-cutters to alleviate a labour shortage in the sector.
The use of cane-cutting trucks would help overcome a shortfall of workers that has persisted for years in the labourintensive cane-cutting industry, said Prasert Tapaneeyangkul, the secretarygeneral of the OCSB.
"The OCSB is seeking the cabinet's approval for Bank for Agriculture and Agricultural Co-operatives (BAAC) to grant cane farmers 3 billion baht in loans for three harvesting seasons, starting from the current season to purchase cane cutting trucks," he said.
The trucks, which cost 5-10 million baht each, can cut 200 to 500 tonnes of cane per day compared with one to two tonnes per manual worker. Up to 700,000 workers are needed to harvest the 6.2 million rai of cane plantations this season.
"Normally, cane cutting needs to be done within 100 days. Some farmers have opted to use fire tactics to speed up cane cutting but this often ends up burning the cane and reducing yields and the sweetness," said Mr Prasert.
"Using fire should not be the option.Machinery use will solve the labour shortage," he added.
To promote the use of technology,the OCSB will provide interest rate subsidies to encourage farmers to apply for the proposed loans. Subsidy rates could vary between 3.5% and 5.5% depending on BAAC decision, he said.
Meanwhile, the OCSB is preparing to issue a statement to counter US claims that the Thai sugar industry exploits child and illegal labour.
The office will call a meeting with cane farmers' associations and sugar millers to compile a report to counter the accusations."We export only 17,000 tonnes of sugar to the US. But as we are the world's third largest sugar exporter,we need to defend ourself against this allegation that needs to be corrected to maintain our reputation," he said.
Other industries such as garments and prawn farms have faced similar allegations. The Foreign Ministry and the Commerce Ministry's Foreign Trade Department are preparing to respond to the allegations, Mr Prasert said.
The use of cane-cutting trucks would help overcome a shortfall of workers that has persisted for years in the labourintensive cane-cutting industry, said Prasert Tapaneeyangkul, the secretarygeneral of the OCSB.
"The OCSB is seeking the cabinet's approval for Bank for Agriculture and Agricultural Co-operatives (BAAC) to grant cane farmers 3 billion baht in loans for three harvesting seasons, starting from the current season to purchase cane cutting trucks," he said.
The trucks, which cost 5-10 million baht each, can cut 200 to 500 tonnes of cane per day compared with one to two tonnes per manual worker. Up to 700,000 workers are needed to harvest the 6.2 million rai of cane plantations this season.
"Normally, cane cutting needs to be done within 100 days. Some farmers have opted to use fire tactics to speed up cane cutting but this often ends up burning the cane and reducing yields and the sweetness," said Mr Prasert.
"Using fire should not be the option.Machinery use will solve the labour shortage," he added.
To promote the use of technology,the OCSB will provide interest rate subsidies to encourage farmers to apply for the proposed loans. Subsidy rates could vary between 3.5% and 5.5% depending on BAAC decision, he said.
Meanwhile, the OCSB is preparing to issue a statement to counter US claims that the Thai sugar industry exploits child and illegal labour.
The office will call a meeting with cane farmers' associations and sugar millers to compile a report to counter the accusations."We export only 17,000 tonnes of sugar to the US. But as we are the world's third largest sugar exporter,we need to defend ourself against this allegation that needs to be corrected to maintain our reputation," he said.
Other industries such as garments and prawn farms have faced similar allegations. The Foreign Ministry and the Commerce Ministry's Foreign Trade Department are preparing to respond to the allegations, Mr Prasert said.
STRATEGY TO FOCUS ON CORE BUSINESSES
The Wattanavekin family plans to expand its key businesses-hotels and sugar mills.
Khunying Natthika Wattanavekin said the family has developed a new strategy for its hotel business, which is run by The Erawan Group, an equal joint venture between the Wattanavekin and Wongkusolkit families. The latter operates the Mitrphol Sugar Group of sugar-mill operators.
"We have delayed about four new hotel projects, mainly upcountry, including the I-Bis hotel in Hua Hin. We will focus on refurbishing our existing hotel properties, such as the Grand Hyatt [Erawan] in Bangkok and the Hyatt Regency in Hua Hin, to prepare for the recovery of the local tourism sector, which is expected next year," said Natthika, who is on the board of directors at the Grand Hyatt Erawan Hotel.
The Erawan Group operates 15 hotels run by international chains including Grand Hyatt, JW Mariott, Courtyard, Renaissance, I-Bis and Sixth Sense. The group recently opened a 300-room Holiday Inn in Pattaya.
"Three to four years ago, we launched our strategy, selling Amarin Plaza, a shopping complex at the Ratchprasong internation, back to the landlord so that we could concentrate on constructing and developing hotels, which is our field of expertise.
"After building them, we appoint international chains to run our hotel properties," said Natthika.
She said the group had set an investment budget of about Bt200 million to renovate the eight-year-old Hyatt Regency Hua Hin.
"So far this year we have renovate half of the 211 guestrooms and the lobby of our Hyatt Regency Hua Hin hotel. The renovations of the rest of the hotel's guestrooms and the Regency Club will be completed by the end of this year" said Natthika.
She said the group would also renovate the balcony area of the Grand Hyatt Erawan by the end of this year to include a restaurant serving international cuisine.
"We have also restructured The Erawan Group by promoting top executives to the board of directors," said Natthika.
Natthika said the Wattanavekin family had three major business groups, which include both joint ventures and owned firms: the hotel group, the sugar-mill business, and the Kiatnakin Group of banks and financial institutions.
"We run the businesses professionally, transparently and according to the ethical code and philosophy of my father, Kiat Wattanavekin, founder of the Kiatnakin Group," she said, adding that the family started in the liquor and construction businesses before diversifying into sugar milling and finance about 50 years ago.
Natthika is also chairman and CEO of Eastern Sugar Group, which operates a sugar will in Sa Kaew province.
The group recently upgraded the processing machines at the sugar mill to increase production capacity to 21,000 tonnes a day from 18,000 tonnes.
"We have received permission from the local authorities to increase our production capacity by another 12,000 tonnes a day.
"We will complete this additional expansion within the next three to five years," she said.
Natthika said the group recently expanded its sugar operation by producing ethanol from molasses. With an additional investment of more than Bt1 billion, the factory is now able to produce 150,000 litres of ethanol a day.
Applying the Alfa Lava and Delta T production system originated in the US, the factory is able to produce ethanol from both sugar molasses and tapioca chips.
Natthika, who is also chairman of the Thai Sugar and Bio-Energy Producers Association, said the government should draw up medium-and long-term plans to support and promote the productivity of local sugarcane farmers, especially in the areas of water resources, and research and development of news sugar-cane genes.
Khunying Natthika Wattanavekin said the family has developed a new strategy for its hotel business, which is run by The Erawan Group, an equal joint venture between the Wattanavekin and Wongkusolkit families. The latter operates the Mitrphol Sugar Group of sugar-mill operators.
"We have delayed about four new hotel projects, mainly upcountry, including the I-Bis hotel in Hua Hin. We will focus on refurbishing our existing hotel properties, such as the Grand Hyatt [Erawan] in Bangkok and the Hyatt Regency in Hua Hin, to prepare for the recovery of the local tourism sector, which is expected next year," said Natthika, who is on the board of directors at the Grand Hyatt Erawan Hotel.
The Erawan Group operates 15 hotels run by international chains including Grand Hyatt, JW Mariott, Courtyard, Renaissance, I-Bis and Sixth Sense. The group recently opened a 300-room Holiday Inn in Pattaya.
"Three to four years ago, we launched our strategy, selling Amarin Plaza, a shopping complex at the Ratchprasong internation, back to the landlord so that we could concentrate on constructing and developing hotels, which is our field of expertise.
"After building them, we appoint international chains to run our hotel properties," said Natthika.
She said the group had set an investment budget of about Bt200 million to renovate the eight-year-old Hyatt Regency Hua Hin.
"So far this year we have renovate half of the 211 guestrooms and the lobby of our Hyatt Regency Hua Hin hotel. The renovations of the rest of the hotel's guestrooms and the Regency Club will be completed by the end of this year" said Natthika.
She said the group would also renovate the balcony area of the Grand Hyatt Erawan by the end of this year to include a restaurant serving international cuisine.
"We have also restructured The Erawan Group by promoting top executives to the board of directors," said Natthika.
Natthika said the Wattanavekin family had three major business groups, which include both joint ventures and owned firms: the hotel group, the sugar-mill business, and the Kiatnakin Group of banks and financial institutions.
"We run the businesses professionally, transparently and according to the ethical code and philosophy of my father, Kiat Wattanavekin, founder of the Kiatnakin Group," she said, adding that the family started in the liquor and construction businesses before diversifying into sugar milling and finance about 50 years ago.
Natthika is also chairman and CEO of Eastern Sugar Group, which operates a sugar will in Sa Kaew province.
The group recently upgraded the processing machines at the sugar mill to increase production capacity to 21,000 tonnes a day from 18,000 tonnes.
"We have received permission from the local authorities to increase our production capacity by another 12,000 tonnes a day.
"We will complete this additional expansion within the next three to five years," she said.
Natthika said the group recently expanded its sugar operation by producing ethanol from molasses. With an additional investment of more than Bt1 billion, the factory is now able to produce 150,000 litres of ethanol a day.
Applying the Alfa Lava and Delta T production system originated in the US, the factory is able to produce ethanol from both sugar molasses and tapioca chips.
Natthika, who is also chairman of the Thai Sugar and Bio-Energy Producers Association, said the government should draw up medium-and long-term plans to support and promote the productivity of local sugarcane farmers, especially in the areas of water resources, and research and development of news sugar-cane genes.
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