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Market Reports

July 17, 2013

Thai poultry prices stable and may increase despite troubled Saha Farm (week ended Jul 12, 2013)
 
An eFeedLink Exclusive        
 
 
Price summary
 
Demand this week is fairly stable while production of big chicken fell. This keeps farm gate price unchanged at THB47.0/kg (US$1.506/kg) for four weeks.
 
The troubled Saha Farm Group, one of Thailand's leading poultry exporters, will not affect chicken production for local and export markets as Saha Farm's member farms will switch their live chicken to another processing plant.
 
Saha Farm Group, which commands approximately 20% of Thailand's poultry market share, faced liquidity crunch due to losses incurred in 2012 from high animal feed costs, rising labour costs and the Thai Baht's appreciation.
 
Farm gate price is still expected to increase until the end of this year, because of peak demand from the European Union, even though fresh chicken export to Japan and South Korea are still delayed.
 
 
Market analysis
 
Saha Farm Group had to reduce production to about half its slaughtering capacity of 600,000 to 700,000 chickens a day. Saha Farm Group aims to return to normal business in about next two months, after securing financial support from its Middle Eastern investors.
 
The company's factory producing frozen chicken in the Chai Badan district of Lop Buri province was also hit by fire around midnight on July 6, causing damage to the whole building, which is valued at THB60 million (US$1.93 million).
 
Immigrant workers held a protest at the factory on July 5, demanding overdue wages and threatened to set the factory ablaze, after the company failed to pay their salaries. On average, the factory provides employment to 3,017 migrant workers from Myanmar.
 
The company has a payroll commitment of THB200-300 million (US$6.44 million - US$9.66 million) each month for about 20,000 employees.
 
Panya Chotitawan, the group chairman, said that the company was in the process of solving its liquidity problem and will sell some assets to secure funds to pay for staff salary.
 
He said the company has received financial support from poultry importers in the Middle East to enable it to continue production and serve their markets. He said it would take about two months to get the company back to normal production.
 
Saha Farm has debts of around THB5 billion (US$161 million), with the largest amount owed to local commercial banks such as Krungthai Bank, Thanachart Bank and the Islamic Bank of Thailand.
 
Since September 2012, the company has aimed to increase annual export of chicken to 120,000 tonnes, up from 90,000 tonnes, after the European Union allowed imports of fresh poultry meat from Thailand from July 2012.
 
The National Food Institute projects exports of Thai poultry and poultry products at 646,000 tonnes in 2013, worth about THB80 billion (US$2.58 billion), up 15% from 2012.
 

Markets

Pricesfor whole dressed
chicken as of
  Jul 5
(in Thai baht/kg)

Prices for whole dressed
chicken as of
  Jul 12
(in Thai baht/kg)

Changes
(in Thai baht/kg)

Supermarkets (Bangkok)

120-140

120-140

---

Public markets (Bangkok)

90-95

90-95

---

Public markets (Suburbs)

85-90

85-90

---

Farm gate 

47.00

47.00

---

US$1=THB 31.20 (Jul 17, 2013)

 

 


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