Export Potential Of Thai Canned Tuna To Japan

Export Potential Of Siamese tinned Tuna To JapanChapter I foundation garmentCanned sea foods industry is a value-added industry for both domestic and imported raw products before exportation to foreign countries. It has been one of Thais exported agricultural industries which big in value continuously. Canned tuna industry is the most important put up sea foods in Thailand. It has a value of 84 percentage of the numerate transcribed sea foods export value in 2008. Thailand has been the worlds largest exporter of tinned tuna for the last ten grades, represents well-nigh 40 percent of worlds canned tuna export amount (EXIM Bank, 2009).Japan has been one of the major commercialises of Thai canned tuna export for very long period of times. Japans rate of import has been increasing intimately 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 diminish to 53.43 percent in 1995 (Boonmasu, 1998). More recently, Thailand motionless held most of the Japan canned tuna market shares (50.9 percent) in 2008, f exclusivelyowed by Indonesia (23.2 percent) and Philippines (16.7 percent) (Global Trade, 2008).However, nowadays Thailand is facing the problems of meter 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 turn out 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 worlds 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 coun tries for up to 70 percent of the total tuna input, this results as the high damage of fruit 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 take away 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 Thais total canned tuna production.International trade agreements like the Japan-Thailand scotch 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 canvass. 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. However, Thailand still has to import raw material (tuna) from other countrie s and JTEPA only affects tuna that been caught from Thais boat or IOTC (Indian Ocean Tuna Commission) members, so Thailand cannot get full advantage from the agreement. It is judge that AJCEP agreement will increase advantage of Thai canned tuna export to Japan after its enforcement in 2009.From the above reasons, it is important to study Japans canned tuna market nature, market share, comparative advantage of Thailand, and link trade agreements to make a decision of expansion the export of Thais canned tuna market to Japan in the future.ObjectivesTo study market nature, change of gain rate and market shares, and scrap of Thai canned tuna in Japan.To study effectuate of international trade agreements JTEPA and AJCEP to Thai canned tuna export to Japan.To analyze relationships amidst frozen tuna prices and amount of Thai canned tuna export to Japan.Contribution/BenefitsThis study provides knowledge of canned tuna market in Japan including growth rate and changes of market share to know potential and competitiveness of Thai exports. And withal provides knowledge of factors effecting export value change to find errors which could be utilise by exporters and other researchers for further study.Methodology and VariablesThe study gathers related secondary data from previous researches, journals and thesis, including statistics from both the government and public sectors e.g. EXIM bank, Department of Export Promotion, Department of Business Economics, Department of Fisheries, and Food and Agriculture Organization (FOA).descriptive Analysis will be used to describe nature of canned tuna market export from Thailand to Japan, effects of JTEPA and AJCEP on canned tuna export, growth rate and market shares of Thai canned tuna export to Japan, and SWOT epitome, to see competitiveness between Thailand and its major competitors Indonesia and Philippines, by using statistic data in the form of chart, percentage, and table to support the description.Grangers Causality hear is used to examine relationship of frozen tuna price and amount of Thai canned tuna exports to Japan.If then(prenominal) X contains useful information (in addition to the information in past Y) to predict future Y, so X granger causes Y.Z fails to Granger-causes Y if MSEE(xtIt-1) = MSEE(xtJt-1) here It-1 contains past information on Y and Z while Jt-1 contains past information on Y only.Regression xt=c+xt-1+yt-1+utTest H0 =0Chapter II Literature ReviewSeveral published literatures had examined export potential of Thai canned tuna to foreign markets such as the study of Charoenkhwan (2003) which studied on the general condition of canned tuna marketing in U.S.A., market share of Thai canned tuna in U.S.A. and factors that impact on demand for input of U.S.A. to Thai canned tuna. The result of studying general condition indicated that Thailand was the first ranking of the world in canned tuna industry. They also analyzed on changing of export value of canned tuna by using Cons tant Market Share lesson (CMS) indicated that Albacore, Yellow fin and the other tuna of Thailand had exports average growth more than U.S.A. trade effect. For an analysis on factors that impact on demand for input of U.S.A. to Thai canned tuna was dependent on import price in Thai canned tuna adjusting by consumer price index of U.S.A.Boonmasu (1998) aimed to study the nature, together with the problem and the obstacles of the production and export, including the study of market competitive advantage of Thai canned tuna product by comparing among the majors competitors within this expanse Philippines and Indonesia. Her study emphasized on important export markets the USA, EU, Japan and the world markets. Quantitative analysis, descriptive analysis and revealed comparative advantage (RCA) are the major tools she used to analyze the ga at that placed secondary data during 1991-1995. The outcome of the study shows that Thailand has to import the frozen tuna around 70 percent of the volume needed for production. The analysis of the main export markets of Thailand has found that the product is more competitive comparing to the other competitors. However, such competitive ability and advantage seem to be decrease consistently.Study of Kijboonchoo and Kalayanakupt (2003) attempted to measure the comparative advantage and competitive strength of Thailand in exporting canned tuna to the world market between 1982 and 1998. They also used revealed comparative advantage (RCA) as the major tool. Their study shows that Thailand was the largest exporter of canned tuna in the world market between 1982 and 1998. Thailands comparative advantage has been change magnitude in all the studied periods. Also market shares in terms of export volume and value have fallen significantly in the studied periods.Kaewchuey (2007) studied production and marketing of wield fruit and crude palm oil in Thailand, and analyzed palm oil price relationship between different market levels. The Vector Error Correction Model (VECM) and the Ganger Causality Test were employed to examine the horizontal and vertical price relationships of palm oil. The results showed that all price series used in this study were integrated of order I. Therefore, the Cointegration Test was applied to rivulet for long term price relationships between the markets. The results indicated that there were long term relationships between international prices of crude palm oil and wholesale prices, and between wholesale prices and palm fruit prices in local markets. The result from the Grangers Causality Tests revealed that vertical price relationships existed. International prices of crude palm oil Granger-caused wholesale prices, which, in turn, Granger-caused palm fruit prices in local markets. The results implied that the price of palm oil at a higher market level could influence the price at a lower market level.Chapter III Japan Canned Tuna MarketMarket CharacteristicsGrowth Rate and Market Shar esTable 3.1 Market shares of canned tuna in major market countries in the year 2008(Unit percents)USAAustraliaJapanThailand46.496.250.9Indonesia6.2123.2Philippines12.50.716.7Others34.92.19.2Total100100100Source Global Trade, 2008Table 3.2 Thailands frozen tuna imports 2007-2008 (separated by species)(Unit Q in 1,000 tons, V in billion Baht)Species2007Q2007V2008Q2008V% changeQ% changeVSkipjack403.116,169.7498.928,202.923.874.4Yellow Fin844,477.482.25,356.5-2.119.6Albacore32.22,019.424.21,928.4-24.8-4.5Big Eye2.8113.24.2221.150-95.3Others0.818.90.17.216.6-61.9Total522.922,789.6609.635,716.1Source INFOFISHChapter IV International Trade AgreementsJTEPAAJCEPChapter V SWOT AnalysisStrengthWeaknessOpportunityThreatsChapter VI Grangers Causality TestIf past X contains useful information (in addition to the information in past Y) to predict future Y, we say X granger causes Y.Note that Grangers causality test may or may not indicate causal effect of x on y (could you think of some examples?) Z fails to Granger-causes y if MSEE(xtIt-1) = MSEE(xtJt-1)Here It-1 contains past information on Y and Z while Jt-1 contains past information on Y only.Regression xt=c+xt-1+yt-1+utTest H0 =0Chapter VII Conclusion and DiscussionKijboonchoo and Kalayanakupt (2003) had made suggestions of six possible ways to solve the Thais canned tuna problems and obstacles that should be done by both government and private sector the problem of the lack of domestic raw materials should be eliminated or reduced, production plants and procedure should be upgraded, Thai producers and exporters should build up their own brands and trademarks, Producers and exporters should adjust their plants, products and production procedures to meet the importing countries standards and regulations, the related government unit should provide more information to the Thai producers and exporters, and they should have the web post in order to provide their information to customers.