August 4, 2010

 

Thailand orders feed meal prices to be cut

 

 

The Thai Commerce Ministry's subcommittee on feed meal prices has instructed manufacturers to cut their selling prices by 25% in order to lower the costs for livestock farmers and make meat prices more affordable for consumers.

 

The measure takes effect next Monday (Aug 9).

 

Vatchari Vimooktayon, director general of the Internal Trade Department, said feed meal producers had to lower their prices following a reduction in raw material costs.

 

"To ensure fairness for feed meal producers, livestock farmers and consumers, the ministry will set up a monthly meeting to consider feed meal price adjustment in accordance with changing production costs," she said.

 

According to the ministry, prices of raw materials for feed meal have dropped by 0.65% over the past two years. The price of soymeal decreased from THB17 (US$0.53) a kilogram to THB12.74 (US$0.40) last month.

 

The ministry will announce a price list for feed meal as soon as possible, so that enterprises do not sell at a level higher than the prices set.

 

The price of chicken feed meal is currently quoted at THB519 (US$16.13) per 30 kg bag, the price of layerhen feed meal is THB444 (US$13.80) for the same size of bag, and that of pig feed meal is THB489 (US$15.20), again for a 30 kg bag.

 

If enterprises do not comply with the ministry's order, it will enforce the law governing goods and services price control to force them to do so, said Vatchari.

 

Pornsilp Patcharintanakul, president of the Thai Feed Meal Association, said producers would agree to lower their prices if the ministry promised to allow a price increase within one week if they faced higher production costs.

 

"Indeed, the prices of feed meal raw materials are likely to be on the rise soon. Soymeal, the price of which has dropped significantly, accounts for only 20% of the feed meal ingredients. The government must agree to allow price increases within a short time if producers face higher costs of production," he said.

 

He said feed meal producers would essentially agree to lower their prices in accordance with the ministry's instruction.

 

So far, 52 association members have agreed to cut their retail prices next week.