Following the news earlier this week that the EU had discovered traces of banned antibiotics in some Thai food imports, shares in Thai food exporters have slumped.

By the mid-session break today [Friday], shares in Charoen Pokphand Foods (CPF), Thailand's biggest chicken exporter, were down 1.5% to Bt6.4 (US$0.15), while GFPT had slipped 6.6% to Bt42.75.

An antibiotic drug called nitrofuran was found in samples of warm-water prawns and shrimp imported into the EU from Thailand and a number of other South Asian countries including Vietnam, which yesterday denied the problem. It was also found in poultry imported from Thailand.

The European Commission said this week it would start testing all Thai poultry as well as shrimp from Vietnam, Thailand and Myanmar for banned drugs. If more traces of nitrofuran are discovered, the EU may decide to ban shrimp and chicken from the relevant countries, which would hit processors hard. GFPT generates 50% of its revenues from exports to the EU.

CPF would not be so hard hit as shrimp and chicken exports to the EU account for just 9% of its total food exports.