April 21, 2012
In line with consumption demand from the feed industry, Thailand's soy imports are likely to decline in 2011-12 but rise again in 2012-13.
Despite a continued growing demand for food use and direct feed use (in forms of full fat soy), total soy domestic consumption in marketing year (MY) 2011-12 is estimated to decrease by 5% to 2.17 million tonnes as soyoil crushers are likely to reduce their crushing activities due to challenges in the soy meal market.
In MY 2012-13, soyoil crushers should increase soy deliveries to 1.8 million tonnes from 1.7 million tonnes in 2011-12, in response to continued growing poultry and shrimp industries. In line with this consumption trend, total imports of soy are estimated to decrease to two million tonnes in MY 2011-12 and recover to 2.2 million tonnes in MY 2012-13.
The US market share is estimated to increase from 18% in MY 2011-12 to 27% in MY 2012-13. This reflects the dry weather conditions in Brazil and Argentina for their MY 2011-12 soy crops, which will lead to increased buying of US soy by Thai importers in the last quarter of 2012. Accordingly, Thailand's imports of US soy are forecast to increase from 400,000 tonnes in MY 2011-12 to 630,000 tonnes in MY 2012-13.
Lowered prices for domestic soy meal caused feed mills to switch from imported products to domestic products, and as a result, soy meal imports in 2011 decreased by 8%, 2.40 million tonnes as compared to 2.62 million tonnes in 2010. Soy meal imports should grow steadily in MY 2011-12 (2.80 million tonnes) and MY 2012-13 (2.95 million tonnes) in line with soy meal consumption.
The US market share was negligible in 2011 as less-expensive supplies from South American countries became readily available due to an improved harvest. It is forecasted that there should be renewed demand of US soy meal in the Thai market in MY 2011-12 and MY 2012-13 reflecting drought-driven lower supplies in Brazil and Argentina in MY 2011-12.
Like soy meal, soyoil production fluctuates in line with soy deliveries to crushing plants. Production in MY 2011-12 is estimated to drop and then to recover in MY 2012-13.
The crushers accelerated their exports to cope with increased soyoil production, accordingly, exports of soyoil in 2011 doubled from 19,899 tonnes in 2010 to 38,364 tonnes. Trade sources reported that the amount of soyoil exports in 2012 should be close to 30-35,000 tonnes. Due to a complicated and bureaucratic administration of import permits discourages imports, there have been no imports in recent years and this trend should expect to continue in the next years.
The Thai soyoil crushers should benefit from the incoming economic integration of ASEAN countries, called ASEAN Economic Community (AEC), which will begin in 2015. Since Thailand currently has the largest soyoil crushing capacity in the Southeast Asia, currently capacities are more than 10,000 tonnes/day in Thailand as compared to 4,000 tonnes/day in Vietnam and none in other ASEAN countries, it is expected that Thailand will become a major supplier of soyoil and soy meal to other ASEAN economies. This in turn should guarantee Thailand as a promising market for soy exporters, including the US.