Thailand defers all chicken exports

Thailand defers all chicken exports

Agence-France Presse, Bangkok

Thailand has suspended all chicken exports after confirming the first two human cases of bird flu and detecting the disease in chickens here, deputy agriculture minister Newin Chidchob said on Friday.

"After the international community learns we have found the bird flu virus in Thailand they will stop importing Thai poultry products, so in response to this Thailand will temporarily suspend exports of poultry products," he said.

Newin said the government will now negotiate with importing nations in a bid to persuade them to accept cooked chicken products.

It will then move to rehabilitate poultry farmers whose livestock have been slaughtered in a nationwide cull of seven million chickens, he said.

The European Union, which is Thailand's second biggest customer for chicken products, had said it was watching the situation closely and could announce a ban if an outbreak was confirmed.

Meanwhile, analysts said on Friday that the country's stock market and tourism industry are at risk of being severely damaged by the outbreak.

Major agricultural companies involved in Thailand's US$1.2 billion chicken exporting business saw their share prices slump after the government announced on Thursday there were three suspected human cases of the disease.

The gloom deepened when Hong Kong and their biggest customer for chicken products, Japan, ordered import bans and the European Union threatened similar action if the cases were confirmed.

Brokers said that by mid-session, food giant Charoen Pokphand's shares had fallen 10 percent to 3.60 baht (9.2 U.S. cents) while shares in another major exporter GFPT had plummeted 14.3 percent to 18.60 baht.

"The market has been brought down significantly because of this (bird disease)", said KGI Securities analyst Pat Pattaphongse. "We are advising our clients avoid these stocks until we can assess the situation."

Pat said that since the scare began in November, when the government reported what it insisted was an outbreak of fowl cholera and bronchitis, and not avian influenza, Charoen Pokphand's share price had fallen 10 percent while GFPT had suffered a 37 percent decline.

The bird flu crisis which has also hit Vietnam, Japan, South Korea and Taiwan is blamed for weakness across the Thai bourse, which at mid-session on Friday was down nearly two percent, while the agribusiness sector fell more than six percent.

Analysts said the Thai economy could withstand the crisis, but the chicken exporting industry said it feared the outbreak could cripple its international and domestic sales.

Kim Eng Securities analyst Michael Stead said that after weeks of denials from the Thai government, open and transparent handling of the crisis was needed to restore market confidence.

"Long-term market prospects still look good, but it depends how long it takes to clear up this matter," he said.

The analyst said the damage would also spread to other lucrative sectors of the Thai economy.

Pacific Asia Travel Association director John Koldowski said a downturn in tourism across the region was inevitable, particularly because tourists were concerned about the lack of transparency in dealing with the disease.

"People heard for so long that there were no terrorists in Thailand and then there were, and now they are being told there is no problem with this outbreak but they don't believe it," said Koldowski.