Growth in Thai broiler exports could stall due to a shortage of foreign workers coupled with costly shipping, according to Kukrit Areepakorn, head of the Thai Broiler Processing Exporters Association.
He forecasts that Thailand’s broiler exports in 2021 could hit 950,000 tonnes, up from 938,000 tonnes last year. Although Covid-19 vaccinations and recovery of the global economy is around the corner, labour shortages will remain an industry bottleneck.
He suggested that foreign workers be allowed back in the country if they abide by quarantine procedures. However, the government should give some room for labour movement. Workers should be allowed in if they are not coming from red zones with the highest virus risk.
The labour shortage issue could jeopardize productivity, he added. Foreign workers are currently banned from re-entering the country due to covid outbreaks in neighbouring countries and Thai exporters have seen their production capacity plummet compared with the pre-covid period. Some Thai exporters have opted not to take orders or have chosen to underutilize their capacity as some 10,000 foreign workers are effectively locked out from their jobs in the broiler industry.
Exports in the first two months of 2021 were worth 15.4 billion baht, a 9% decline year-on-year due to the slump in tourism and lackluster export markets.
Shipping to Europe is costly, with the spot price as high as US$10,000 for a 40-ft container. Discounts of up to 50% can be had if shipments are booked two months in advance, however.
Orders have resumed from Japan, Malaysia, South Korea and China, but producers lack the production capacity to fill them.
A source familiar with the industry expects prices in local markets to rise especially in April and May as European importers rush orders to meet Thailand’s quota allotment.
EU and UK markets are rebounding. However, container shortages and higher freight costs are working against Thailand’s broiler exports. Skinless boneless breast (SBB) from Thailand is quoted at around US$2,200-2,300/tonne, while steamed diced SBB sells for US$2,400/tonne and prices are likely to increase.
In comparison, Brazilian exporters offer SBB for US$1,900-2,000/tonne, and steam-salted SBB for US$2,000-2,100. Broiler exports to Africa will soon increase due to high raw material costs and lackluster production capacity there. The price could rise from current US$1,700-1,800 to $2,300/tonne.
Japan
There is demand for both raw and cooked meat. Japanese importers have begun to contract and make long-term orders, but Thai exporters prefer to do short-term contracts with prices are set to rise. Currently, boneless legs are US$2,000/tonne and boneless leg kirami US$2,300-2,400/tonne. Prices are set to rise. Cooked karaage price is around US$ 4,500-4,600/tonne. Raw yakitori is around US$5,500-5,600 and cooked yakitori US$7,000/tonne. With strong demand offshore, it is likely that local producers will be unable to keep up with snowballing orders from Japan.
China
The Chinese market is improving. Chicken paws (below 30 grams apiece) are priced at US$2,800-3,100, chicken paws (30 grams apiece up) US$3,400-3,800, wing tips US$750-800, gizzards US$2,500. Imported Brazil thighs with leg are US$1,200/tonne.