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New Year doldrums for Chinese food offerings
Businesses that normally look forward to Chinese New Year
as members of Thailand’s Chinese community flock to purchase items for use
in religious offerings faced the doldrums this year due to soaring prices of
eggs, chickens and pork.
A report published recently by the KASIKORN Research
Center, formerly the Thai Farmers Research Center, had anticipated more
money would be spent this year, with half of the money going towards
religious offerings. However, the rising prices of eggs, chickens and pork,
which together form an important component of the offerings, saw producers
of these goods miss out on a golden opportunity.
However, there was better news for fruit sellers, thanks
to the free trade deal on fruits and vegetables signed with China last year,
which forced down prices of fruits by as much as 20 percent. (TNA)
ASEAN ministers push for economic community
The Association of Southeast Asian Nation’s (ASEAN)
dream of creating a region-wide economic community edged closer to becoming
realized on January 21 when ASEAN economic ministers met in the Indonesian
city of Yogyakarta for an unofficial meeting and agreed on a plan to see the
birth of the AEC by 2020.
According to the plan, agreed by Thailand’s Commerce
Minister Watana Muangsook and his counterparts from the nine other ASEAN
member states, the region will work on the coordination of operations in 11
types of goods and services with the eventual aim of creating the ASEAN
Economic Community (AEC).
The 11 branches in question include agriculture, rubber,
timber products, fabrics, electronic goods, automobiles, information
technology (IT), health products, tourism and aviation. Thailand has been
made responsible for the tourism and aviation sector, and has already joined
with Singapore to announce an open sky- policy on commercial flights,
starting in February of this year.
The ASEAN ministers also met with European Union trade
officials, agreeing to expand cooperation in terms of trade and investment.
The EU will negotiate with representatives of ASEAN’s private sector at a
workshop to be held in Bangkok in March, while in May the EU will help
organize a seminar on EU food safety regulations during the THAIFEX trade
exhibition.
Vietnam and Laos, meanwhile, were given assurances by the
other ASEAN members that they would receive full ASEAN backing in their bids
for WTO membership. (TNA)
Chonburi Livestock Department gives assurance the province is free from avian flu
Culling of over 4,000 birds a precautionary measure
Veerachai Somchart
As the threat of the avian influenza virus spreads
throughout Asia and with the advent of suspected cases in Thailand,
government officials are being very careful not to cause panic among the
community at large so that it has minimal impact on the Kingdom’s vital
tourist income.
During a meeting at city hall last week, Suparp Phakdee
from the Chonburi Livestock Department announced that precautionary measures
have been undertaken in the province with officials culling over 4000 birds.
Suparb maintains that Chonburi is free from infection despite the
unexplained death of over 200 chickens and ducks at a number of farms in the
region.
Pisit Ketphasook, Chonburi governor, informed the media
that he had received word from the Ministry of Interior to keep a close eye
on the situation and ensure that the province remains free from the disease
as well as implement meticulous inspection of Chonburi’s poultry farms.
Suparp Phakdee informed the media that Thailand’s
eastern region is the last to be scrutinized even though Chonburi Province
exports 128 million chickens and 60 million ducks per year for consumption
in the domestic and regional markets. He added that Thailand earns 50
billion baht annually from poultry exports, of which Chonburi has a 10
percent share.
The province has 837 chicken farms and 850 duck farms
registered with the Livestock Department. However, there are an estimated
200 farms that serve the local markets, but are not registered with the
government agency.
Suparp explained that to ensure consumer confidence, a
committee has been created to closely supervise the poultry industry
including farms, transport services and slaughterhouses. A team of over 120
officials are now monitoring around-the-clock for any signs of avian flu in
the poultry population.
Suparp admitted that since December 2003, a total of 200
birds were reported having died under mysterious circumstances, plus 400
that were not reported but were nonetheless discovered.
Precautionary measures were implemented and the slaughter
of 4,000 birds was undertaken as a result despite the insistence that there
was no bird flu in the province or in Pattaya City. A large number of birds
were also culled in the nearby province of Chacherngsao where an even
greater risk of the disease is present.
BOT to scrutinize credit card consumerism
The Bank of Thailand (BOT) has stated it will closely
monitor the credit card market and may also review the current requirement
regarding the minimum monthly salary of card holders in response to worries
over Thais’ spending habits.
BOT Governor Pridiyathorn Devakula said, “The BOT needs
to evaluate whether the minimum monthly salary of 15,000 baht set for card
applicants is appropriate for current economic conditions. There is concern
over the social issue of encouraging the public to spend too much through
credit and becoming burdened by debt.”
Pridiyathorn conceded credit cards have become an
important tool in modern economic systems. However, the central bank will
seek precautionary measures to avoid social problems that may arise from the
credit card business. He stressed that too much spending could eventually
destroy what has traditionally been a culture of saving, especially among
low income earners.
The central bank currently requires card issuers to
charge clients a combined interest rate and service fee of not more than 18
percent a year, which enables banks to gain a 10 percent spread - the
difference between the interest rate and the cost of card issuance.
Pridiyathorn said, “This rule has encouraged credit
card issuers to exercise more caution when it comes to expanding the card
holder base.”
According to BOT figures, as of end-September, 2003,
domestic commercial banks issued a total of 2.86 million credit cards, while
non-bank firms issued a total of 3.57 million credit cards. (TNA)
Auto industry growth boosts investment in eastern provinces
An increase in investment in the automobile and parts
industries has fuelled the growth of overall investment in eastern provinces
by 17.73% last year, according to the Board of Investment (BOI).
Varaporn Chersa-art, Director of BOI’s Eastern Region
Investment and Economic Center, said that 332 investment projects in the
region were granted promotional privileges in 2003 with an investment value
increasing by 78.98 percent from the previous year and employment rising by
29.78 percent. She said the investment projects that were granted most
privileges involve automobile and parts, metal products and parts, and mould
manufacture. (TNA)
Repurchase rate
to remain unchanged
The Bank of Thailand (BOT)’s Monetary Policy Committee
has decided to keep the repurchase (RP) rate unchanged, as internal and
external economic environments still remain sound, according to BOT
Assistant Governor Bandid Nijathaworn.
After a meeting of the central bank’s Monetary Policy
Committee, Bandid said, “The committee considered the current monetary
policy and interest rates to be appropriate and in accordance with the
country’s economic conditions, and resolved that the RP rate be maintained
at 1.25% annually.”
Bandid explained, “A thorough review of the country’s
latest economic data and indicators showed that expanding consumption,
investment and exports, as well as a surplus current account, high-level
foreign reserves, and lower foreign debts confirm Thailand’s economic
stability. The inflation rate is also being maintained at around 0.2
percent. These factors make the current interest rate suitable.” (TNA)
Jewelry exports likely to grow 15% this year
The country’s jewelry exports are likely to grow 15%
this year, with total value of US$2.5 billion, as a result of tax incentives
and efforts to seek new markets, according to an industry executive. Preeda
Tiewsuwan, Chairman of Pranda Jewelry Plc. projected that the jewelry
business would grow on par with the government’s intention to promote
Bangkok as a fashion hub.
Jewelry exports totaled $2.31 billion in the first 11
months of last year, and were expected to reach $2.5 billion next year.
Biggest gains are predicted in the major destinations of the US, Germany and
United Kingdom. (TNA)
Use of gasohol on the rise
The government, through the Ministry of Energy, is
launching a campaign, encouraging motorists to turn to use ‘gasohol’,
which is the mixture of gasoline and alcohol in the 9:1 proportion on the
average, following a recent oil price hike in the domestic market, caused by
rising oil prices in the world market.
An initial survey found that sales of ‘gasohol’ at
petrol stations have been increasing, reflecting that more motorists were
turning to use the alternative fuel, which is about 0.50 baht cheaper than
benzene.
Energy Minister Prommin Lertsuridej said earlier this
week that he had turned to use ‘gasohol’, and had faced no problems.
(TNA)
Oil Fund may be used
to halt price fluctuations
The Energy Policy and Planning Office (EPPO) is studying
the possibility of using money from the Oil Fund in order to accumulate oil
reserves, and to prevent future price fluctuations.
EPPO Director-General Metta Bangturngsuk revealed that
despite the fact that the government was set to float the price of cooking
gas in April, it would continue to collect money from oil users to go into
the Oil Fund in order to pay off old debts incurred by government efforts to
cap cooking gas prices.
Currently the government has to pay around 5 billion
baht, or 400 baht per month, to gas and oil refineries as part of the debt
repayment program.
The government is also likely to invest in energy
stability measures by creating strategic oil reserves when oil prices are
cheap in order to keep prices down when global prices rise.
“Approaches to oil reserves must be studied hand-in-hand with the land
bridge project in the south, as the two projects are related. We need to see
who will benefit from the oil storage facilities that will be constructed.
It is possible that we will negotiate the borrowing of oil from traders for
storage in the land bridge’s storage facilities, which can be used when
oil prices are high. This could be in exchange for greater state
facilitation for oil traders,” Metta said. (TNA)
Prawn prices soar
As Thailand’s chicken industry feels the brunt of the
latest outbreak of chicken cholera, at least one group of farmers is
celebrating. Not only has the price of prawns rocketed from 150 baht per
kilogram to 200 baht, but prawn farmers are using the revived interest in
prawns to penetrate new markets in Europe and Japan.
Phot Aramwattananon, deputy president of the Association
of Black Tiger Prawn Farmers, Producers and Exporters, said, “Consumers
are turning to prawns in preference to chicken following the outbreak of
chicken flu in other parts of Asia and chicken cholera in Thailand. But the
rising prices can also be attributed to the fact that many producers had
lowered their production to prevent losses at a time when prices were
low.”
Thailand’s black tiger prawn industry has been buffeted
by US allegations of market dumping, which has seen a heavy reduction in the
volume of prawns going to Thailand’s number one prawn export market.
Thailand has consistently fended off the accusations, noting that costs of
producing farmed prawns in Thailand are considerably lower than those of
harvesting marine prawns in the US. However, Thailand’s black tiger prawn
industry feels it will be able to pull itself up by a shift of focus towards
the European and Japanese markets. (TNA)
Cabinet gives nod
for anti-HIV drug plant
Proposed by the Government Pharmaceutical Organization
(GPO), the government has approved a plan to construct an anti-HIV drug
plant in Thailand to meet the World Health Organization (WHO)’s standard.
The Cabinet agreed to the proposal at its latest meeting.
The move is aimed at meeting the WHO’s requirement,
stating that as of the year 2005, countries which are eligible for financial
assistance from the WHO’s World AIDS Fund must purchase anti-HIV medicines
from only standardized plants certified by the WHO.
The Ministry of Public Health announced that construction
of the new anti-HIV drug plant was scheduled to be completed by the end of
this year. The new plant will be constructed by selected contractors having
qualifications and experience in design and construction of drug plants in
accordance with the WHO’s criteria and standard. (TNA)
Tax measures to boost use of alternative energy
The Ministry of Energy is preparing a raft of tax
measures designed to encourage the use of alternative energy, including
wind, water, biomass and solar power, from the current 0.5 percent to 7.5
percent by the year 2011.
Siriporn Sailasuta, Director-general of the Department of
Alternative Energy Development and Efficiency, said that her department has
been asked by the ministry to study measures to promote the use of
alternative energy in order to reduce the country’s fuel imports. Tax
measures are likely to include the carrot of tax concessions for users of
alternative energy sources, in particular industries which consumed large
quantities of energy.
“In addition, the Ministry of Energy will focus on the
promotion of research and studies on the use of alternative energy in
Thailand, with the government providing partial financial assistance,”
Siriporn said, adding that more companies investing in Thailand will be
using alternative energy sources which is now required by current
legislation. (TNA)
Thai energy plans may
spur a Singapore tax cut
Singapore and Thailand look set to become embroiled in a
race to become the region’s foremost oil hub if Singapore announces new
tax cuts to curb competition from Thailand.
An oil industry source recently told TNA that Singapore
was desperately drawing up measures in response to Thailand’s plans to
become a regional hub for the oil trade, in anticipation of the official
opening of the Sriracha Hub in the eastern Chonburi Province on 29 January.
Noting that the oil trade formed one of Singapore’s
main sources of revenues, the source said that the Singapore government may
slash corporate income tax from 10 percent to 5 percent in order to compete
with Thailand’s announcement that it would cut corporate income tax to 10
percent from its previous level of 35 percent.
“If Singapore cuts taxes, Thailand might have to make
adjustments in order to boost its competitiveness again. Traders are
currently working out how best to reduce costs. This comes despite the fact
that Thailand has appropriate strategies for becoming a hub for the oil
trade, with links to southern China, Indochina and other countries,” the
source said.
The Thai government has already announced that it will
cut the red tape surrounding imports and exports of oil, and is likely to
reduce prices for oil tankers and storage facilities to below the levels
currently charged by Singapore. (TNA)
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