October 24, 2003
Corn Prices in Thailand Increase Due to Shrinking Supply
Corn prices in Thailand are likely to stay firm over the next few days as demand from the domestic poultry industry is strong and supplies are declining, traders said on Tuesday, October 21.
Thailand is one of Asia's major chicken exporters and corn is a major poultry feed ingredient.
"Several feedmills are buying corn as much as possible. The supply in the local market is falling as the harvest season is nearly finished," said one corn trader.
Local corn was offered on Tuesday at 4.95 baht/kg (US$124/ton), up from last week's 4.80 baht/kg.
Farmers will not start planting the new 2004/05 (July-June) crop until March/April, traders said.
They said the government had not built up stocks which could help keep up supply in the market.
The Thai agriculture ministry estimated the 2003/04 corn crop at 4.28 million tons, up from 4.21 million tons from the previous crop because of favourable weather.
The ministry estimated domestic corn consumption at around 4.23 million tons in 2003, up from around four million tons last year.
It expects Thailand to produce 1.1 billion chickens this year, up 5.98 percent from last year, on expectations of higher poultry exports.
No Thai corn has been offered for export this week. It was offered last week at $125/tonne FOB.
"We have not offered corn for exports this week even though some buyers from Malaysia have been seeking to buy," said Thavee Tantiponganant of the Tanyaphan exporting firm.
"The domestic price is rising. It is not easy to buy corn from farmers at the moment."
Thailand is not a major exporter of corn. However, buyers such as Malaysia and Indonesia find Thailand a convenient alternative to major corn exporters such as China because Thailand can supply small amounts and the distance is shorter.
Thailand imported corn until 2000, but exported 500,000 tons in 2001. Exports dropped to 150,000 tons in 2002 and traders estimate the 2003 figure will be no more than last year.
The Thai soybean and soymeal trade was sluggish on Tuesday, with most buyers covering their positions for October-December arrival, soybean traders said.
One million tons of soybean and soymeal was due in Thai ports over the next two months, the traders said.
