Despite strong market volatility, the Thai swine industry has grown recently. Thailand has high hopes for the near future as it wants to be able to soon export pork with the acknowledgement of a Foot-and-Mouth Disease-free zone. Surachai Sutthitham, president of the Swine Raisers Association of Thailand explains.
Pig Progress : What does the Swine Raisers Association of Thailand do?
Surachai Sutthitham: “I have been president of the association for ten years. The association consists of both swine farmers, and representatives of delivering industries like feed mills and feed additive companies. We aim to develop the knowledge and management at these farms, but we also address important actual matters, like for e.g. those around food safety. The association has divided Thailand into nine regions, with the presidents of all regions being a member of the association’s committee. All these members aim to cooperate in harmony.”
What was the situation for Thai swine production like in the last five years? “In this timeframe of five years, we can see that smaller farms are gradually phasing out – we are talking about farms smaller than 100 sows. Middlesize and larger swine farms on the other hand are growing.
“Both consumption and production figures have grown in the last five years. Total production grew from 967,000 tonnes in 2008 to 1.026 million tonnes last year – and further growth is projected for this year. Domestic pork consumption has also grown in these years by about 12-14%.
“Price is what has been the key factor for swine producers in Thailand in recent years. The prices have been very volatile and vary constantly. We have seen prices paid for 1 kg of liveweight pork as high as 80 baht (about €2.10) but also as low as 40 baht (€1.05). The government does not make things easier in my perspective by trying to control these livestock prices. As soon as the prices are too low, the authorities try to purchase pork to tighten supplies and thus to increase the price. But if prices are too high, the authorities do not act. That does not help it.”
Is the price volatility in Thailand linked to the country’s limited export possibilities, due to Foot-and-Mouth Disease (FMD) problems in the past?
“Sure, because 97-98% of our pig production is for local consumption. We can export only 2-3%. Currently, there are two different pathways for exports. On one hand, there are exports of live pigs, going to Cambodia, Vietnam and Myanmar. To large markets like Japan, South Korea, China and Hong Kong, we can only export chilled and frozen pork. This is being done by large agribusiness companies like Betagro and Charoen Pokphand, but from individually certified farms and plants.”
How does Thailand aim to overcome its FMD-related export bans?
“The association, in cooperation with two departments within the Thai Department of Livestock Development, has been working on the creation of an FMD-free zone, consisting of eight provinces in the east of Thailand. This June, the World Organization for Animal Health (OIE) will come to Thailand and we hope and expect documents to be approved, stating that this area is an officially recognized FMD-free zone. We have good hopes, as similar initiatives have been successful in Indonesia and the Philippines. “The markets in Japan, South Korea and Singapore would be the first new targets – to most of these areas we already send chilled and frozen pork from individual plants and farms.
“We will aim to keep the pig supply chain from this area separate from domestic swine production, so they will not interfere with each other. All in all, this would be a good opportunity to get better prices.”
Is there any reason why this particular area in Thailand was chosen for compartmentalisation?
“In the past, we aimed to have two FMD-free regions in Thailand, out of the nine. The other one that would have been suitable would have been in the deep south of Thailand. This would have made it logical to export to e.g. Malaysia. The market there, however, is already dominated by the pork production industry from the Philippines as well as Australia, so there would not be tremendous market opportunities for Thai pork. “The other location, in the east of Thailand, however, offers better opportunities as there the large sea port of Laem Chabang is located. In addition, the landscape offers a natural buffer, with the sea on one side and mountains on the other. This makes it easier to protect the area from influences. “The area will initially be ‘FMD-free with vaccination’. We should not aim for an immediate 100% free zone which is also free of vaccination. We learnt from experiences in other places – where vaccination has been withdrawn too quickly, the disease was likely to reappear.”
Do you think these potential new export opportunities will help to stabilize the prices for pigs paid in Thailand?
“Absolutely, we will have more channels to release pork production. It means our members will have more potential. They will use this channel for domestic demand-supply balancing.”
The Association of South East Asian Nations (ASEAN) is a free trade zone, FTAs have been arranged with many regional trade partners like China, Australia, New Zealand, India, Japan and South Korea – and further integration with these zones is expected. How do these benefit the Thai swine industry?
“In my opinion, Thailand is the best in swine production in South East Asia, in terms of quality. So a zone without trade barriers on one hand is benefiting producers, but it also means we have to open our borders to pork from abroad. “I see real potential when I consider the area comprising the so-called ASEAN Plus Three – this includes China, Japan and South Korea. I really would like them to further strengthen these cooperations. There is a big market potential there and they will prove to be big opportunities. Japan for instance imports 1,200,000 tonnes of pork every year.”
What are your expectations for the next five years?
“Disease outbreaks will continue to occur less frequently, and production is estimated to increase. “The market will continue to see strong price differences for pigs. I think, however, that the government should no longer try to control prices. The market can play a role by itself – let demand and supply control prices. In my opinion, it would be better for the authorities to control feed costs – these rise by the day.
“Finally, the swine industry in Thailand will continue to evolve as in the last five years – the number of smaller farms will decrease, bigger farms on the other hand will get bigger.”