Export Potential Of Thai Canned Tuna To Japan
Info: 2030 words (8 pages) Dissertation
Published: 11th Dec 2019
Tagged: International Business
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).
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. However, Thailand still has to import raw material (tuna) from other countries and JTEPA only affects tuna that been caught from Thai’s boat or IOTC (Indian Ocean Tuna Commission) members, so Thailand cannot get full advantage from the agreement. It is expected 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 Japan’s canned tuna market nature, market share, comparative advantage of Thailand, and related trade agreements to make a decision of expansion the export of Thai’s canned tuna market to Japan in the future.
To study market nature, change of growth rate and market shares, and competitiveness of Thai canned tuna in Japan.
To study effects of international trade agreements; JTEPA and AJCEP to Thai canned tuna export to Japan.
To analyze relationships between frozen tuna prices and amount of Thai canned tuna export to Japan.
This 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 also provides knowledge of factors effecting export value change to find errors which could be used by exporters and other researchers for further study.
Methodology and Variables
The 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 analysis, 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.
Granger’s Causality Test is used to examine relationship of frozen tuna price and amount of Thai canned tuna exports to Japan.
If past 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: MSE[E(xt|It-1)] = MSE[E(xt|Jt-1)]
Here It-1 contains past information on Y and Z while Jt-1 contains past information on Y only.
Test H0: Î²=0
Chapter II: Literature Review
Several 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 Constant Market Share model (CMS) indicated that Albacore, Yellow fin and the other tuna of Thailand had export’s 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 region; 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 gathered 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 lessened 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. Thailand’s comparative advantage has been decreasing 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 palm 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 test 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 Granger’s 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 Market
Growth Rate and Market Shares
Table 3.1: Market shares of canned tuna in major market countries in the year 2008
Source: Global Trade, 2008
Table 3.2: Thailand’s frozen tuna imports 2007-2008 (separated by species)
(Unit: Q in 1,000 tons, V in billion Baht)
Chapter IV: International Trade Agreements
Chapter V: SWOT Analysis
Chapter VI: Granger’s Causality Test
If 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 Granger’s 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: MSE[E(xt|It-1)] = MSE[E(xt|Jt-1)]
Here It-1 contains past information on Y and Z while Jt-1 contains past information on Y only.
Test H0: Î²=0
Chapter VII: Conclusion and Discussion
Kijboonchoo and Kalayanakupt (2003) had made suggestions of six possible ways to solve the Thai’s 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 site in order to provide their information to customers.
Cite This Work
To export a reference to this article please select a referencing stye below:
Related ServicesView all
Related ContentAll Tags
Content relating to: "International Business"
International Business relates to business operations and trading that happen between two or more countries, across national borders. International Business transactions can consist of goods, services, money, and more.
Literature Review on Business Internationalization
Internationalization can be described as 'the process of increasing involvement in international operations'. It deals with how the firm adapts operations like strategy, structure, resources etc. to perfectly fit the international environments....
Concepts of an International Joint Venture (IJV)
A Number of organizations are establishing their operations into new markets in order to sustain and develop their competitive edge . International expansion is a challenging undertaking and in ord...
DMCA / Removal Request
If you are the original writer of this dissertation and no longer wish to have your work published on the UKDiss.com website then please: