January 7, 2008
Thai feedmills seek lower-cost grains from neighbors
Rising prices of animal-feed raw materials have encouraged Thai feedmillers and raisers of poultry and livestock to secure lower-cost grains from neighboring countries, a senior feedmiller industry official said on Monday (January 7, 2008).
"Thai feed producers are buying corn and soymeal from other origins such as Laos and Cambodia because of better prices under the Acmecs regional cooperation program," said Pornsil Patchrintanakul, president of the Thai Feed Mill Association.
The Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy, or Acmecs, is a cooperation program among Cambodia, Laos, Myanmar, Thailand and Vietnam to facilitate trade and strengthen economic ties.
Thailand imports about 100,000 tonnes of corn annually under the program, said Pornsil, adding that the country will import more of the grain as local corn prices and feed demand continue to rise.
Corn is the main ingredient in poultry feed, constituting 50 percent of the raw material used in chicken feed. Soymeal, full-fat soy and other ingredients make up the rest.
Thai corn prices averaged THB8.18 a kilogram in the last quarter of 2007, up 51.2 percent on year, while soymeal prices averaged THB16/kg during the same period, up 45.5 percent on year, according to the Office of Agricultural Economics.
Under the Acmecs program, Thai feedmills such as Charoen Pokphand Group can buy corn at a lower average price of THB7-THB7.50/kg, Pornsil said.
The soaring prices of Thai grains can be attributed to increasing competition between agricultural users for feedmilling and industrial users for ethanol production.
Pornsil said more costly animal-feed raw materials would increase costs for Thai livestock raisers by around 20 percent this year, noting that prices of live pigs would rise to THB50/kg this year from THB42/kg last year.
He added that feed producers will need to improve their technologies and management systems to cope with the higher costs.
THB1 = US$0.0336 (Jan. 7)
