December 18, 2009

Thailand to extend soy import duty cut

The subcommittee on food import policy agreed to extend the import tariff cut for soymeal throughout next year, as the measure directly reduces Thai farmers' production costs.

Thailand's Commerce Minister Porntiva Nakasai said the proposal to keep the rate at 2% would be submitted to the Cabinet next week so that it can be implemented at the start of next month. The current tariff cut expires on December 31.

To ensure the domestic soyoil industry is not adversely affected by the tariff reduction, the government has also ordered manufacturers to buy domestic soymeal at THB10.90 a kilogramme from local producers.

Extension of the measure would cut the production costs for animal feed by 25 satang to THB1.62 per 50 kg. The cost of pig feed would fall by 15.37% from 2008, that of chicken feed by 3.67% and that of feed for laying hens by 2.88%.

Feedmeal producers have been urging the government to rapidly finalise its decision on whether to continue the import tariff cut for soymeal.

Further delays would be costly, they argue, as the normal tariff for imported soy is 10%.