Export Potential Of Thai Canned Tuna To Japan

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Chapter I: Introduction

Canned sea foods industry is a value-added industry for both domestic and imported raw products before export to foreign countries. It has been one of Thai’s exported agricultural industries which grown in value continuously. Canned tuna industry is the most important canned sea foods in Thailand. It has a value of 84 percent of the total canned sea foods export value in 2008. Thailand has been the world’s largest exporter of canned tuna for the last ten years, represents about 40 percent of world’s canned tuna export amount (EXIM Bank, 2009).

Japan has been one of the major markets of Thai canned tuna export for very long period of times. Japan’s rate of import has been increasing almost every year. It imported 1.6 million cartons in 1991 and increased to about 2.6 million cartons in 1995 which Thailand was the number one exporter. Thailand held the market shares of 53.4 percent in 1991, increased to the highest of 71.8 percent in1994, and decreased to 53.43 percent in 1995 (Boonmasu, 1998). More recently, Thailand still held most of the Japan canned tuna market shares (50.9 percent) in 2008, fallowed by Indonesia (23.2 percent) and Philippines (16.7 percent) (Global Trade, 2008).

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However, nowadays Thailand is facing the problems of quantity and price uncertainty including import tax in exportation of canned tuna to Japan. In the last quarter of 2008 (October – December) the export of canned tuna from Thailand experienced a negative trend as a result of the economic crisis. Except for the USA, exports to other major markets showed sharp decline during this period including Japan which decreases about 7.8 percent (Josupeit, 2009).

Even though Thailand is the world’s largest canned tuna exporter, amount of tuna in Thai water area alone is not enough for the canned tuna industry so Thailand has to import raw material (tuna) from other countries for up to 70 percent of the total tuna input, this results as the high cost of production because about 73 percent of canned tuna production cost come from chilled or frozen tuna (Jintatam, 1997)

Indonesia and Philippines are the major competitors that have some advantages over Thailand. These two countries have abundance of tuna resource and low labor cost which give them the advantage of lower cost of production. However, their production forces are still far off Thai’s total canned tuna production.

International trade agreements like the Japan-Thailand Economic Partnership Agreement (JTEPA) and the ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP) are the major factors affecting import tax of canned tuna in Japan that needed to be studied. Japan has decreased import tax for Thai canned tuna from 4.3 percent to 3.2 percent in 2009 and will decrease to 0 percent in 2012 under JTEPA.

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