Russian Su30's For Chickens.

[ratcatcher]

What about Russian side of the deal? They've got their regular chicken suppliers, I suppose. How are they going to react to shitloads of chicken coming from Thailand?

It's the government owned company that sells the jets, what about chicken traders? I suppose they are privately owned.

<{POST_SNAPBACK}>

THIS ITEM FROM BANGKOK POST, Sat Dec. 24th

CPF backs chicken for fighter jets

Plans to barter with Thai farm products

WALAILAK KEERATIPIPATPONG & PHUSADEE ARUNMAS

Adirek: Russian inspectors needed

Leading chicken producers and exporters have thrown their full support behind a government proposal to exchange chicken for Russian Su-30 fighter jets.

''This barter trade is a good concept to push our farm exports,'' said Adirek Sripratak, the president and CEO of Charoen Pokphand Foods Plc (CPF).

''It is not necessary to trade the jets only with chicken. Other farm products; rice, rubber and shrimp should be considered.''

According to Prime Minister Thaksin Shinawatra, the government is still shopping around different countries for new fighter jets. Although it is considering trading farm products, chicken is preferred for the Russian Su-30 jets.

The cost to buy the 12-strong fleet of jets is reported to be about 35 billion baht, approximately the same value of Thai chicken exports in one year.

But critics doubt that a deal would benefit all chicken companies, not just the big firms that can provide large supplies.

Mr Adirek dismissed a report that the CP Group, the country's largest agribusiness conglomerate, would benefit directly. Any shipments would be managed by the Thai Broiler Processing Exporters Association.

''There's no need to just take CPF chicken. The government might pick meat from other companies to trade,'' he said.

Russia annually imports about two million tonnes of chicken meat. Some 80% comes from the United States but none from Thailand. Russia also imports 500,000 tonnes of pork.

Mr Adirek said the deal would help Thailand penetrate the Russian market.

''[The lack of chicken imported by Russia] is not because Thai chicken does not meet its hygiene standards, as Russia has not sent a team to inspect Thai poultry production plants yet,'' he said.

Anan Sirimongkolkasem, the president of the Thai Broiler Processing Exporters Association, noted that Russia has a complicated import system, in which quotas are set each year based on the past records of importers. More importantly, importers can buy meat only from plants certified by Russian hygiene experts.

Thailand asked Russia to open the market for Thai chicken two years ago, according to Mr Anan, and invited the country to examine Thai chicken plants, but the visit was cancelled due to bird flu.

However, with high production standards and an improvement in bird flu prevention and control, Thailand could export to Russia, he said.

Although selling prices were a key in barter trade negotiations, Mr Anan said, they should not be fixed but should vary with market rates.

The association estimated that Thailand's chicken exports next year would rise to 350,000 tonnes of meat for 40 billion baht, compared with the estimated 270,000 tonnes for 32-33 billion baht this year.

Meanwhile, CPF dismissed reports that the company's planned poultry investment in Russia would benefit from the barter trade.

CPF is conducting a feasibility study to invest in the Russian chicken industry. A team has been studying investment regulations and market potential in the overall business climate.

CPF is also considering taking over a poultry plant in Russia, in a similar move to its investment in a Turkish chicken business.

''Russia now welcomes more investment from overseas, and we can invest in something 100% there,'' Mr Adirek said.

Apart from investing in Russia, CPF plans to inject six to seven billion baht in various businesses such as shrimp and fish, next year.

Its sales are projected at 130 billion baht for 2006, compared with 110 billion this year. Next year, the company plans to ship 110,000 tonnes of chicken and 60,000 tonnes of shrimp, rising from 90,000 and 42,000 tonnes respectively this year.

CPF shares closed yesterday on the Stock Exchange of Thailand at 5.85 baht, up five stang in trade worth 84.8 million baht.

In the Russian's case, the government owns the company that wants to sell the jets.

I believe in Thailand's case, the company that wants to sell the chickens "owns" the government. Or at least that's the perception judging from the close relationship between CPF & TRT

[Plus+]

I, personally, hate dealing with people who change their minds every day - it's chickens today, also shrimp tomoroow, and rubber and/or rice next week. I imagine how much headache it is for Russian arms trader. How may companies have to be involved? What about the final payment - Su makers don't use frozen chicken in its production, I believe. What if chickens don't fetch the agreed amount? Who will settle all the payments with market fluctuations and so on, considering that it will be spread over a few years.

Can Russians actually manage all this? What if it all turns sour - they'd be stuck with the chickens forever - they won't get their jets back in any case.

Now, I remember, they owe Thailand money for rice. Money. If this deal goes through Thailand will owe Russians dead chickens and chicken parts.

This will be the one to watch over the next couple of years.

[ilyushin]

Let's talk chicken. From 2002 they have discussed chicken for arms with Russia. Look it up.

Interesting article.

Date: 07.18.2005 Source: Kommersant

Poultry Producers Ask for Protection from Thai Chickens

Last week the Russian Poultry Union turned with an official letter to the Prime Minister of Russia Mikhail Fradkov protesting against a possible increase in the quotas on poultry meat import. The draft resolution has already been prepared by the Ministry of Economic Development and Trade: Thailand is going to use its supplies of poultry which exceed the established quota to pay for Russian jets. Poultry producers believe that this barter deal will not only bring down prices on the domestic market but also threatens Russian poultry producers with an avian influenza outbreak.

The Russian Poultry Union is the largest industrial alliance of poultry producers created with the support of the Ministry of Agriculture in May of 2001 to lobby the interests of market players in bodies of power. The union consists of 219 members.

The volume of consumption of poultry meat in Russia is slightly higher than 2 million tons per year. Exactly half of this volume is imported from abroad. Poultry imports to Russia are regulated with an import quota in the amount of 1,050,000 tons. Above-quota supplies are prohibited.

Russian poultry producers wrote a letter to Prime Minister Fradkov stating that they believe it is unreasonable to increase imports of poultry meat and ask "not to allow imports of poultry meat form Thailand which create a threat to the veterinary well being and food safety of Russia." The reason for the letter was the draft resolution prepared by the Ministry of Economic Development Trade, according to which the amount of the quota on chicken meat import in 2005 may be increased by 50,000 tons. According to the document, the additional quota is allocated exclusively for the importation of 250,000 tons of Thai chicken which is to be supplied to pay for Russian jets. It was initially planned that the entire volume of Thai chicken meat will be sold off at open markets, but according to Federal Unitary Enterprise Rosoboronexport (on behalf of which the contract for the supply of aviation equipment was concluded) "the poultry meat will be sent off for processing at Russian plants."

A kilogram of Thai chicken filet in wholesale prices costs around $1.5, whereas similar products of Russian producers are currently sold for $4 per kilo. "The volume of Russian poultry production is around 900,000 per year, 200,000 of which accounts for filets. A misbalance comes when a mere 10% more is imported. In this case we have 25% and this will inevitably lead to a fall in prices by 1.5-2-fold," says Albert Davleyev, head of the Russian representative office of the USA Poultry & Egg Export Council. Anyway, the price issue is not the only thing that bothers market players. "50,000 tons is an annual output volume of five average factories, but if only this was the issue. An avian influenza epidemic which can be transferred to our country with frozen meat from Thailand can threaten the existence of the industry. In return for defense contracts the Government seems prepared to sacrifice the entire poultry industry," said Nikolai Khaustov, Director General of ZAO Ptitseprom.

I also remember a team of Russian inspectors in Thailand earlier this year. Trying to find the article.

[phazey]

Wasn't this scenario also happening a while back in the Swedish Saab (JAS-39 Grippen) deal ? Did they pull out because of the earlier bird flu scares ? I shall search lots....

edit: Hmm...wonder what happened here...

Edited December 27, 2005 by phazey

[ilyushin]

''[The lack of chicken imported by Russia] is not because Thai chicken does not meet its hygiene standards, as Russia has not sent a team to inspect Thai poultry production plants yet,'' he said.

Russian inspections: Russian inspectors will visit poultry processing plants in Thailand to determine import status

February 2, 2005

MeatNews.com Volume 7, Issue 6

http://www.meatnews.com/index.cfm?fuseacti...cle&artNum=8959

Russian meat processing and health inspectors will visit eight chicken plants in Thailand. The inspections will take place this week, according to TNA English News. After the visits, Russia will decide on whether or not to begin importing Thai chicken products, a statement from the Ministry of Industry said. The inspections, which come at a time when Thailand is trying to control the latest outbreak of avian influenza, follows counter-trade negotiations between the two countries. Under the plan Thailand would use fresh and frozen chickens in partial payment for Russian military equipment.

The veterinary inspectors, whose visit was demanded by Russia as a requirement for considering Thailand's counter-trade bid, will remain in Thailand until February 7. Although Thailand originally suggested visits to 24 slaughter plants and 52 processing plants, the Russians indicated that the current visit would be a preliminary one, following a later visit by a second team which would determine whether or not Thailand has met the specified quality conditions.

[phazey]

Guess there will be a few jobs going at Saha Farms then

[Richard W]

What???  Thailand is going to war with....???

<{POST_SNAPBACK}>

One trusts that conflicts with Burma will remain at the level of mortar duels and the Malaysian fishery protection (any Thai deaths since 26 November 2003?) will not get out of hand.

That still leaves the possibility of a Kosovo-type scenario in the South.

SLORC of course is a sane and peace-loving government which has rational reasons for moving its capital. One trusts there will be no perceived duplicity in business dealings with them.

One shudders at the thought of the 'rough neighbour' turning nasty.

Was it obvious that the UK and Argentina might go to war? I think Knott.

[phazey]

SLORC of course is a sane and peace-loving government which has rational reasons for moving its capital.  One trusts there will be no perceived duplicity in business dealings with them.

SPDC - SLORC vanished aeons ago.

and why fight fire with fire - Mig 29's (all two of them!) vs Su-30's

And to add re: moving the capital. It's a positive move - the golf courses are not so crowded now

[Plus]

It looks like it will take longer to buy those jets than to build another new airport. By the time they decide to stick to good old F16s they will be so out of date that no "upgrade" will help. I read they can extend their lifespan to another 15 years with an upgrade.

The only hope is if Kongsak gets booted.