December 21, 2011

Thai Feed Weekly:  Feed ingredient prices weaken as feed mills prepare for year-end break (week ended Dec 12)
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Price Summary
Prices of most feed raw materials weakened during the week on slow buying as feed mills prepare for a four to five day year-end break.
While the drop in the price of corn was marginal, those of rice products, cassava and soy meal were quite sizable. Soy meal fell by THB1/kg and broken rice by US$25/tonne.
Market analysis
The sizable drop on the prices of rice by-products and cassava could have more to do with oversupply than with the temporary slowdown in procurement by feed makers preparing to shut operations during the yearend holidays. Tonnes of rice crops and cassava damaged during the flooding are being retrieved from flood-hit farms, dried and milled into feeds, earlier reports from Thailand's Office of Agricultural Economics said.
Since after the flooding, which heavily inundated croplands in about 30 provinces of Central Thailand, the price of broken rice, along with other rice byproducts, has been falling.
Falling prices overseas have more to do with the drop in the price of soybean meal locally. Thailand imports most of its soy and soymeal requirements. Since August, soy meal prices have dropped from US$393/tonne to about US$330/tonne in November, according to commodity price tracker Index Mundi.
Thai Feedmill Association analysts, however, expect the current softening in feed ingredient prices to be brief. They see prices recovering immediately after the New Year holidays because of strong demand with broiler, pig and shrimp producers expected to step up production to meet expected rise in local and export demand.
Rapid expansions in Thailand's broiler sector this year is seen to increase production from the current 22-24 million birds a week to 26-28 million a week six months from now. Such spike in output is expected to trigger further demand.
Even before the current rash of expansions, Thailand's feed consumption had already ben exploding. In 2010, Thai feed demand increased by one million tonnes to 14 million tonnes,  pushing feed mills' usage of local corn produce to 74%, up 14% from the previous year.  It also drove corn imports up to 700,000 tonnes in 2010 from 500,000 tonnes in 2009.


PRICE as of  Dec 5
(in Thai baht/kg)

PRICE as of  Dec 12
(in Thai baht/kg)

(in Thai baht/kg)

Corn (Delivered to feed factory)








White Broken Rice A.1 Super (US$/tonne)




White rice bran




Rice bran residue 








Soymeal (imported)




Soymeal (local)




Fishmeal (shrimp grade)




US$1=THB 31.24 (Dec 21, 2011)


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