Thailand welcomes growth in food industry after COVID-19 crisis – but urges businesses to remain vigilant

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Thailand’s Ministry of Industry (MOI) reported earlier this month that the local food industry had performed impressively in the first seven months of 2021 (January to July) despite continued challenges from COVID-19 , particularly in the export and food manufacturing sectors.

“The Thai food industry has now returned to a state of growth and expansion after experiencing some contraction last year,”Interior Ministry minister Suriya Juangroongruangkit said via an official statement.

“Food production and manufacturing as measured by the Manufacturing Production Index (MPI) grew 2.9% year-on-year, mainly due to the use of implemented ‘Bubble and Seal’ measures. by companies to control risks and prevent epidemics in factories [whilst] allowing most factories to operate production lines as usual.

“We have also seen the amount of agricultural raw materials increase [and] were able to ensure that these were sufficient to meet the needs of different product manufacturers, especially those using sugar cane, cassava and various other fruits and vegetables.

The ‘Bubble and Seal’ measures in Thailand refer to strict protocols implemented by the government to prevent factory workers from traveling and potentially spreading COVID-19, by requiring them to stay in factories where they work or to travel only between dormitories and workplaces. All factories, regardless of infection reports, were required to implement these protocols.

The food manufacturing sector is expected to achieve an overall growth of 4.5% as measured by the MPI by the end of the year. This will be a significant boost for the sector, which contracted 6.5% overall in 2020 due to the impacts of COVID-19. The decline in the first quarter of the year alone was 11%, according to USDA data.

In addition to food manufacturing, food exports have also seen significant growth in the first seven months of 2021 and the government has even higher hopes for this sector, banking on increasing food demand and l ‘exhaustion of stores in various foreign countries.

“In the first seven months of this year, the value of Thailand’s food exports was 622.7 billion THB ($ 18.6 billion), a growth of 4.5% year-on-year, supported by the growing demand for our food products from major trading partners such as China, the United States and the European Union ”,Juangroongruangkit said.

“These countries relaxed local lockdowns as vaccination rates increased, so restaurant businesses have reopened and are recovering, especially in China to which Thailand has seen 40% export growth. from one year to the next. The US and EU are also showing signs of recovery in exports, with increased demand for products such as frozen seafood and canned pineapples. “

Analysis by the National Food Institute of Thailand (NFI) of the Home Office affiliate organization indicated that the last five months of the year will be even better for the food export sector.

“[We predict that] food exports will increase by 11% to a value of 427.3 billion THB ($ 12.8 billion) in the last five months of the year – an overall increase of 7.1% year-on-year from of 2020 to reach a total value of 1.05 billion THB ($ 31.4 billion) are expected for food exports ”,said IFN director Anong Paijiprapapon.

“In addition to the reopening of catering and HORECA in the main markets of Thailand’s trading partners, food stocks in many Asian countries as well as in the Middle East and Africa are now also declining. , there will therefore be an increase in import demands from these markets. This will be further supported by the depreciation of the Thai baht. “

COVID-19 still a risk

That said, the ministry also warned local food companies to remain vigilant over risk factors that could affect food production and export numbers for the rest of the year, such as the continued risk posed by COVID- 19.

“Any outbreak of COVID-19 in any establishment will affect the production capacity and delivery of goods, especially taking into account the mutation of the virus”ME said in his warning.

“The mutation of the virus may also force many importing countries to step up measures to combat the pandemic, which would lead to a slowdown in demand for products, and transport costs remain high as rates continue to rise, which will have a particular impact on commodities such as rice, sugar and other grains at low unit prices.

“[As such, we encourage] factories to implement strict dormitory monitoring, be proactive with filtering measures, and adjust Bubble and Seal measures according to the size of your business, as they are all crucial to weathering the crisis and keeping the business running. factory for food production and exports.


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