May 24, 2004
Thai Feedmeal Prices To Fall On Expected Larger Output
Prices of corn and soymeal in Thailand are forecast to fall in the second half of the year, as more supplies are expected to enter the market then, the Kasikorn Research Center said Friday.
A higher volume of locally produced corn and soymeal is expected to enter the market from the onset of the harvest in August, as high prices of the commodities have encouraged farmers to produce larger crops, the center said in a report.
Also, the government's plan to allow 500,000 metric tons of corn imports at a 0% tariff rate during the third quarter of the year will also result in an increase in feedmeal supply and weigh down domestic corn prices, the center said.
Livestock associations have also called for the removal of a 5% import tax on soymeal to encourage more imports, but the proposal has not been presented yet to the Cabinet for final approval, the center said.
"This could cause domestic feedmeal prices to decline in the second half of the year and will help reduce costs among farmers," it said.
The Ministry of Agriculture and Cooperatives forecast corn production for 2004 at 4.17 million tons, up from 4.11 million tons in 2003. It forecast soybean output in 2004 at 266,030 tons, up from 259,863 tons in 2003.
Corn prices in Thailand have risen to around 8 baht ($1=THB40.718) a kilogram this month, from around THB4/kg early this year, the center said. Soymeal prices rose to THB17/kg from around THB12-THB13/kg previously, it said.
Drought in major feedmeal producing countries the U.S., Argentina and Brazil has dented corn and soymeal production there and pushed up prices of the commodities globally, the center said.
Robust exports of Thai corn prompted by high global corn prices have resulted in limited availability of corn in Thailand, it said.
Exports in the first three months of the year totaled 257,462 tons, a nearly fourfold increase from the same period last year, due to growing demand from South Korea, Taiwan and Malaysia, the center said.
