November 4, 2004

 

 

Thai Grains Trade Quiet While Awaiting Soymeal Policy Announcement

 

Thailand's grains trade was quiet on Wednesday, as importers waited for the soymeal import policy for 2005 to be announced before finalising any forward contracts.

 

Indian soymeal was offered steady at $225/ton cost-and-freight, C&F Bangkok for November 15 - December shipment yesterday.

 

The price of domestic soymeal was 9.70-9.75 baht/kg ($237-238/ton), falling from last week's 10 baht.

 

"Nobody is buying anything. They are waiting for the government to make a decision first," according to one trader. "Feedmills are moving slowly and cautiously while bird flu persists."

 

The government has been asked to waive its 5 percent import duty on soymeal imports for 2005. The domestic livestock industry submitted this request in a bid to reduce their costs and offset losses from reduced poultry consumption due to bird flu.

 

Commerce Minister Wattana Muangsook has said he would make a decision on soymeal imports this week.

 

Thailand imports almost two million tons of soymeal and a similar amount of beans every year, mostly for feed. Argentina, Brazil and India are its key suppliers. Soymeal is a key feed ingredient.

 

The bird flu situation in Thailand has not improved since the epidemic broke out in January. The country is prepared for more outbreaks of the deadly H5N1 virus with the arrival of the cool season in the next few weeks as well as migratory wildfowl.

 

21 of the country's 76 provinces are still having problems with the bird flu virus.

 

The domestic poultry industry had been severely affected by the outbreaks as Japan and the European Union, formerly its main markets, banned imports of Thai frozen and uncooked chicken.

 

Thai feedmills have bought 12,000 tons of soymeal from India for December arrival, according to traders.

 

"They have bought the meal from the ANP trading firm at around $228 per ton C&F," said one trader.

 

Domestic corn was trading at 5 baht/kg yesterday, unchanged from last week. Corn is another major ingredient in poultry feed.

 

Supplies have fallen with the end of the 2004/05 (July-June) main corn crop harvest. Prices are expected to hold steady in the next week.

 

Thai corn for export was offered at $128 per ton, free-on-board for November shipment yesterday.

 

Corn traders stated that trade has been quiet with no new deals done this week.

 

Thailand is expected to export around 100,000 tons of corn this month, down from 240,000 tons in October.

 

Most of the corn was headed to Malaysia, with a small quantity going to Indonesia.