Escalating feed costs are push for crop expansion in Thailand

Pornsil Patchrintanakul, president of the Thai Feed Mill Association, calculates that more costly raw materials livestock feed will increase production costs in Thailand by 20 percent this year. Between the first and final quarters of 2007, average feed prices in Thailand rose by 51 percent for maize and 40 percent for soybean meal. He also points to the rising trend in freight charges for shipping feed grains from abroad. By his figures, Thai importers paid US$110 per ton to have soybean meal shipped from Latin American countries last year, up from about US$35 per ton in 2006. Pornsil and other feed industry leaders in Thailand say the government should expand the area that its farmers have planted to grow maize in neighboring countries. Each year, Thailand imports about 100,000 tons of maize produced under a regional agreement known as Ayeyawady-Chao Phraya-Mekong Economic Co-operation Strategy (Acmecs).

This offers Thai farmers an opportunity to grow maize and soybeans at lower cost in Laos, Cambodia and Burma. The crops are grown on contract and can be imported for sale under a tariff-free arrangement backed by Acmecs. Vichai Poonpiriyasup, a senior vice-president for the maize integration business of the CP Group, said a number of Thai companies, including CP, were taking advantage of the Acmecs programme, but there was still much room for expansion. So far, for example, only a limited area in Burma has been used for growing maize. Although yields are still relatively low, Mr Vichai continued, the climate and soil conditions in these countries could make them very competitive for growing maize.