As Covid-19 spreads globally we start to identify the potential consequences, that can be divided into the following categories: demand, logistics and labor availability. It is important to monitor these issues, especially local and export demand, in order to make timely decisions that ensure uninterrupted production. Asian Agribiz asked Gordon Butland of G&S Agriconsultants Co Ltd, Thailand, for his thoughts on the evolving situation.
Firstly demand, and what is happening in the USA and UK are good examples. As quarantine measures and travel restrictions are voluntarily or compulsorily enforced, dining out is drastically reduced. Fast food outlets will close, but still operate drive through outlets and delivery services.
However, on March 22, 2020 McDonald’s in the UK has announced that it is closing all stores including drive-throughs. This will affect about 1,500 tons/month of further processed product from Thailand. It is likely that Brazilian beef and possibly some chicken exports will be affected. If stores in the rest of Europe follow suit the effect will escalate.
In 2019, Thailand exported 585,000 tons of further processed product of which 227,000 went to the EU and nearly 300,000 went to Japan. Total revenue was over USD 2 billion. Exports of raw product were 385,000 tons of which 119,000 went to Japan and 82,000 went to Europe.
A significant quantity was sold to other Asian countries outside of China and Japan. Shipments to China from Thailand are now back to normal, but the products imported by China, mid-wing, feet and bone-in-leg represent only 22% of the bird.
The maintenance of the European breast meat market is fundamental for the Thai industry.