Large Companies Hold Majority of Thai Chicken Output11 October 2013
THAILAND - Small farmers are in danger of being squeezed out of Thailand's poultry boom, which has given a 70 per cent market share to vertically integrated poultry companies, according to a new report from Ipsos Business Consulting.
Thailand’s poultry industry is set to enjoy sustained growth that will place it at the heart of the government’s aim of making Thailand the “kitchen of the world”, according to Ipsos Business Consulting.
Poultry production in the country in 2012 exceeded 1.3 million tons, which was last achieved in 2003, prior to the outbreak of Highly Pathogenic Avian Influenza that devastated the industry.
However, the Ipsos report from suggests that the small farmers, who account for 90 per cent of the farms in Thailand, are not well placed to take advantage of this growth opportunity. To secure future growth the industry needs to invest in technology and equipment such as climate control housing and biosecurity production techniques, all of which requires significant capital investment. With current government policy focused on the large players within the market, it is likely that there will be reducing opportunities for small farmers in Thailand.
According to Ipsos, in 2004, 63 million birds were killed to curb HPAI outbreak, an estimated loss of THB96 billion.
Prior to the outbreak, Thailand accounted for 8.3 per cent of world poultry exports and was the number one exporter to the EU and Japan, falling to third place after the outbreak.
The country's poultry industry grew five per cent (compound Annual Growth Rate) between 2004 and 2012 and this is likely to continue until 2015.
Output in 2012 was 1.4 million tons, exceeding the 2003 peak.
The Thai industry is moving towards industrialised farms and a vertically integrated farm structure. The average farm size is 37,147 birds, a 66 per cent increase from 2008, and vertically integrated commercial farms now account for 70 per cent of poultry production.
Domestic consumption accounts for more than 65 per cent of national poultry production, according to Ipsos.
Its report adds the the European Union officially lifted its ban on raw Thai poultry in 2012, after nine years. The top five companies in the sector are CPF, CP, Betagro, Cargill, GFPT and Laemhthong, account for almost 75 per cent of exports of poultry meat.
You can view the full report from Ipsos Business Consulting by visiting www.ipsosconsulting.com.
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