Thai milk industry maintains prices amid escalating costs

Thailand's dairy sector works on keeping market prices despite the ongoing issue of high productions costs.

The launch of AFTA is seen to allow the Thai dairy industry to access inexpensive quality raw milk imports but industry players still face high costs, traders note.

Green Spot general manager for marketing, Chanit said the company, which is the producer of UHT soy milk Vitamilk, believed that the introduction of AFTA would expand the soy milk and UHT milk market, attracting more brands to grab shares in the domestic market.

Currently, Thailand is the main manufacturing base for branded UHT soy milk - Vitamilk, exported to more than 40 countries.

AFTA will not affect the industry although raw milk imports from Australia and New Zealand could be cheaper. This will maintain the cost of production, Chanit said. The company has yet to increase the price of UHT soy milk, even though the cost of production has increased. The product is on the Ministry of Commerce's price-control list.

President of CP-Meiji Co.,Ltd, Prasit Boondoungprasert, said that AFTA will have a positive impact on the Thai milk industry as entrepreneurs can import quality milk powder as an ingredient. However in terms of price, it will be more expensive due to climate change affecting agricultural production.

Currently, the price of milk powder has increased from USD$2,000/ tonne in 2009 to USD$3,500/ tonne this year.