Thailand's corn production high but exports at risk
Marketing year (MY) 2008/09 corn production is marginally affected by flooding. Corn production should seemingly remain higher than the previous year due to better-than-expected yields.
Anticipated yield improvements for off-season crops are expected to overcome flood damage. MY 2008/09 off-season corn production is forecasted to increase significantly following acreage expansion and yield improvements.
Current corn prices have fallen by 25 percent from record 9-10baht/kg (US$284 / tonne) in July 2008. As a result, the Government will implement a corn intervention programme to stabilize domestic corn prices from November 1 - February 28, 2009.
Intervention prices are set at 8.50 baht/kg. Farmers will be able to redeem their corn within 90 days under a 3 percent interest rate. The Government also suspended the preferential treatment received by corn from neighboring countries (Lao, Cambodia and Burma) under the Joint Economic Cooperation Strategy Programme or Ayeyawady-Chao Praya-Mekong Economic Cooperation Strategy (ACMECS).
MY 2008/09 feed corn consumption will likely remain stable in line with swine and poultry production. Despite the anticipated global economic recession, poultry product exports are expected to continue escalating over to Europe and Japan, particularly for frozen chicken meat, stimulated by the food safety concerns on Chinese food products.
MY 2008/09 corn exports are revised downward but still higher than the previous year. Corn export growth will likely slow down in anticipation of strong competition from relatively cheaper Indian and Brazil corn.