The EU's ban on Brazilian poultry imports since 3 September could create incremental opportunities for Thai poultry exporters, although near-term benefits may be limited by pre-ban inventory build-up and limited product overlap. Meanwhile, US-Thailand tariff negotiations are nearing a conclusion, with focus on the final tariff rate and potential exemptions for seafood, pet food and processed food products. EU-Thailand FTA negotiations are also entering a critical phase, with 15 of 24 chapters already concluded and the next round scheduled for 28 September, offering long-term upside through improved market access and lower trade barriers. TU and BTG are our picks.
Research
Food – Trade negotiations & market access back in focus
EU ban on Brazilian poultry imports from September 2026; limited near-term impact on Thai exporters. The EU suspended imports of Brazilian animal products, including chicken meat, from 3 September 2026 after Brazil lost its antimicrobial-compliance status under EU regulations. While the measure affects around US$763mn of Brazilian chicken exports to the EU annually, we believe the impact on Thai poultry exporters will be limited. The risk had largely been anticipated since May 2026, allowing European buyers to front-load purchases and build inventories ahead of the suspension. In addition, Thailand and Brazil primarily serve different market segments, with Brazil focused on raw and frozen chicken products while Thailand specializes in processed and cooked chicken. Implication. Any benefit to Thai broiler exporters (CPF, BTG and GFPT) is likely to be modest, as direct competition with Brazilian exports is limited and Brazil's relatively short poultry production cycle of around 6-7 weeks could allow compliance issues to be addressed and access to the EU market to be restored within a reasonable timeframe. As a result, the duration of the import suspension, rather than the suspension itself, will be the key factor determining any potential upside for Thai poultry exporters.
US-Thailand tariff talks near final stage. US-Thailand trade negotiations under the Agreement on Reciprocal Trade (ART) have entered the final stage, with the Thai government aiming to maintain Thailand’s tariff rate at a level comparable to that of regional peers. For the food sector, another key issue is product-specific tariff exemptions. Thailand has proposed additional tariff exemptions for selected export products worth about US$4.95bn, including seafood and pet food products. Most of the products covered by the exemption request are goods for which the US remains highly dependent on imports, as domestic production capacity is constrained or insufficient to meet demand. If approved, these products would be moved into the tariff-exempt category, directly enhancing their competitiveness in the US market. Implication. We believe the key issues in this round of negotiations are the final tariff rate and the scope of tariff exemptions. Maintaining Thailand’s tariff rate at a level comparable to Vietnam would help preserve export competitiveness and reduce the risk of order diversion to regional competitors. Approval of tariff exemptions for selected products would directly enhance the competitiveness of Thai tuna, seafood, pet food, and processed agricultural products in the US market. If approved, this would represent a significant positive catalyst for exporters with high exposure to the US market, particularly TU.
EU-Thailand FTA negotiations entering a critical phase. Progress on the EU-Thailand Free Trade Agreement (FTA) remains encouraging, with both sides having reached agreement on 15 of the 24 chapters. The 10th round of negotiations is scheduled for 28 September 2026, with the objective of concluding the remaining outstanding issues. Following the completion of negotiations, the agreement will undergo legal scrubbing, signing, and parliamentary ratification, a process that is expected to take around one year. Implication. An FTA could reduce import duties on Thai seafood exports, including tuna and shrimp, supporting stronger export competitiveness and market access over the longer term. For poultry exporters, larger import quotas, lower tariff barriers and improved market access could create additional opportunities to expand shipments to higher-value European markets over time.
Top picks: TU and BTG. TU remains our top pick, supported by resilient earnings growth, positive earnings sensitivity to a weaker Thai baht, and potential upside from ongoing trade negotiations. BTG is our preferred livestock play, offering strong earnings leverage to improving swine and broiler market conditions. Although local swine and broiler prices may soften ahead of and during the Vegetarian Festival, in line with historical seasonal patterns, we expect prices to recover thereafter, driven by tight supply conditions.
Key risks. Weak prices from fragile purchasing power and more supply, high feed costs and a strong THB. Key ESG risks are GHG emissions, waste & water management (E), customer welfare, product quality, health & safety policies (S).