Thesis Abstract and Dissertation Abstracts
An Economic Analysis of the Thailand Tuna Fish Industry
Abstract Category: Other Categories
Course / Degree: Ph.D. Agricultural Economics
Institution / University: Newcastle University, United Kingdom
Published in: 2009
Although Thailand is currently the leading tuna fish exporter in the world, this thesis asks whether the Thai tuna industry really sustainable. Almost all the raw tuna is imported prior to processing for re-export, and tuna stocks are known to be over-fished. This thesis examines the economic, environmental, and social sustainability aspects of the Thai tuna industry. The thesis has three major parts - forecasting future tuna demand, internal and international competitiveness analysis, and sustainable livelihoods of processing workers analysis. First, tuna demand forecasts were estimated by a simple ARIMA model between 2007 and 2011. The results are interpreted in the light of factors involved in tuna demand: population;income; tuna price. The simple projection of the past history of Thai exports indicates that there are two sensible forecast trends (medium and low levels), as informed by consideration of the major drivers of world demand. The low forecast level is considered more realistic given the over-fishing of global tuna stocks. Hence, the Thai industry faces a likely future of declining exports, implying a declining Thai processing sector. Second, the potential of Thai tuna processors depends on key internal and external relationships. For internal relationships, the tuna processing and fishing sectors have been investigated here. The Structure Conduct Performance (SCP) paradigm has been used to identify internal relationships in the tuna processing sector. The Thai processing structure is oligopolistic. The firms’ conduct indicates that tuna processing operates through price leadership by a dominant firm. Branding strategy is only used for the canned product. Vertical and horizontal integration have been adopted by a few larger firms to explicit economies of scale and scope and reduce transaction costs. According to a price-cost-margin analysis, two canning processors are performing poorly, although no fresh and freezing firms are (yet) in this high risk category. One effective fishing sector strategy would be to replace tuna imports with an increased potential for negotiation for rules of origin requirements. However, there is very limited potential for investing in Thai tuna vessels because both purse seine and longline vessels are experiencing losses. Revealed comparative advantage analysis shows that Thailand has had a comparative advantage and has constantly maintained the comparative advantage in the world and with respect to two main importers, the US and Canada, but its comparative advantage has not been sustained in Australia, the EU, the Middle East, and Japan. It is also clear that this advantage depends critically on low labour costs in Thailand, which is not consistent with continued economic growth in Thailand. Trading tariffs, especially in the EU, and rules of origin are contributing to a decline in competitiveness. Porter’s double diamond model identifies that a low labour wage rate country has been a strong source of competitiveness until now but this will decline as wages improve with economic growth and competition in the labour market increase. International demand seems likely to continue to grow in the face of limited supplies, leading to increasing prices for tuna, but the costs (especially fuel and labour) of supply are also likely to rise in the future. Related industries are adequate for tuna processing, but most have alternative activities which could become more profitable and sustainable than tuna trade in the medium term. The Thai industry may be sufficiently strong to cope with these changing circumstances, but it is likely to become more concentrated and not grow in either absolute or relative importance as in the past. The greatest opportunity for the processing sector would seem to be the development of tuna aquaculture in Thailand,which has the necessary marine resources, though this development will need to avoid environmental damage, and also to avoid simply shifting the over-fishing problem upstream to fish feed stocks. Third, sustainability of the Thai tuna industry also involves the livelihoods of workers. We found that larger firms can support better welfare, income, environment, and convenient facilities, though they currently employ relatively few workers. In worker living areas,workers were vulnerable to economic crisis, seasonality of tuna catches, natural disasters, and the insecurity of a personal living place. In the longer term, economic growth within Thailand will generate competitive earning opportunities for many of the present labour force, while the processing sector, if it is to survive, will need to match these earning opportunities and working conditions. If it cannot, it can be expected to decline as labour finds better things to do, as happened to the tuna processing industry in the US. The findings of this thesis are rather pessimistic. The Thai tuna industry will not probably be environmentally, economically, and socially sustainable without substantial adjustment. The industry faces many severe problems in the near future as reflected in lower demand forecasts, lack of raw material,unprofitable fishing operations, emerging shortages of motivated, well-paid, skilled labour, and binding rules of origin and tariff restrictions. As this analysis clearly demonstrates, maintaining both tuna fishing and the processing industry in Thailand will be difficult. Nevertheless, there are opportunities as well as threats, and with innovative and sound management there is still a future for the industry, albeit not with the growth rates which have characterised its past.
Thesis Keywords/Search Tags:
Thailand, Tuna Industry, Livelihoods, Competiveness, Forecasting, ARIMA model, Dimond model, RCA index, Sustainable Livelihood Framework
This Thesis Abstract may be cited as follows:
Supongpan Kuldilok,Kulapa.(2009) An Economic Analysis of The Thailand Tuna Fish Industry. Ph.D. Thesis. Newcastle University:UK.
Submission Details: Thesis Abstract submitted by Kulapa Supongpan Kuldilok from Thailand on 24-Apr-2010 06:19.
Abstract has been viewed 4585 times (since 7 Mar 2010).
Kulapa Supongpan Kuldilok Contact Details: Email: kulapa.s.k@gmail.com Phone: +66852229542
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