December 10, 2007

 

Thai feed makers urge livestock fund to stem grain price hikes

 

 

Feed producers in Thailand have appealed to the government to set up a livestock fund to cope with the soaring grain prices in the world market.

 

Pornsil Patchrintanakul, president of the Thai Feedmeal Association, said prices of corn and soymeal is seen to increase further next year on high demand from the biofuel sector.

 

He said high feed costs would be a burden to meat producers. The fund, which calls for one billion baht initially, is expected to minimise the impact if prices of chicken meat, pork and shrimp were to drop.

 

Pornsil also urged the government to coordinate with neighbouring countries to increase corn and soy plantations. He estimates that additional fields of about 500,000 to one million rai would need an investment budget of around two billion baht.

 

Pornsil estimates that there are more than 100 Thai companies investing in corn and soy plantations in Southeast Asia. Plantations in Laos alone could produce about 100,000 tonnes of corn for Thailand and the volume would be higher if more investments from the government are made, he said. 

 

He also suggested the use of genetically modified (GM) crops to deal with future grain shortfalls.

 

Pornsil said it was acceptable to plant GM crops slated specifically for biofuel as it would be possible to make the colours of GM products different from those of ordinary crops.

 

The most important thing, he says, is for the government to zone GM plantations effectively and ensure the

output is supplied to certain industries only.

 

Besides growing demand from the biofuel industry, the shortage of raw materials is becoming worse as export prices are attractive. Traders plan to export more than 200,000 tonnes of corn this year, especially to Malaysia and Vietnam. Traders receive more than nine baht a kilogramme for corn sold overseas compared with about 8.15 baht in the domestic market.

 

Soy prices are 17 baht (US$0.55) a kilogramme at present, up from 11-12 baht earlier this year, and soy meal is 16.50 baht (US$0.54), also up from 10-11 baht a kilogramme.

 

US$1 = THB30.400 (as of December 7)