November 18, 2010
Thailand extends import tariff on soymeal
The Thai cabinet has extended for another year the 2% import tariff on soymeal despite calls from feed manufacturers to eliminate it.
Commerce Minister Porntiva Nakasai said the government decided to maintain the tariff to stabilise the food industry.
A recent study showed that without tariffs, imported soymeal would flood the country, causing trouble for local soyoil producers and farmers. Thailand's annual production of soymeal is only 200,000-300,000 tonnes a year, meaning more than two million tonnes more must be imported.
The country imported 2.9 million tonnes in 2008, 2.07 million last year and 1.7 million in the first eight months of this year, said the Feedmeal Producers Association (FPA), which wants the import tariff on soymeal eliminated-the same as Malaysia and Indonesia have done-in order to improve the Thai livestock industry's competitiveness.
The FPA says that soymeal is an essential raw material in the supply chain of the country's food, livestock and aquaculture industries, which together generate THB300 billion (US$10 billion) worth of import revenue annually.
Thailand also imports 1.7-1.8 million tonnes of soy, mainly for the cooking oil industry.
However, Porntiva argued that without the import tariff, soyoil prices would rise by 3.7% to THB1.50 (US$0.05) a litre and the government would lose THB600 million (US$20 million).
Normally, soyoil producers, who buy soy from farmers, can earn extra revenue from selling soymeal to local feed producers. Without the import tariff, an influx of imported products will hurt the competitiveness of their own products, pushing the burden to soyoil end-consumers.