ASEAN KEY DESTINATIONS
Exports to ease soybean glut
Thai soybean processors will be allowed to export soybean meal as a temporary measure to bring down a glut that has resulted from high soybean oil production.
The meal is a byproduct of soybean oil production, which has surged in recent months to meet demand from consumers for cooking oil in the face of a severe shortage of palm oil. Commerce Minister Porntiva Nakasai said the soybean meal surplus had pushed down prices by one or two baht a kilogramme to 13 baht.
World soybean meal prices, meanwhile, have risen to 18 baht a kilogramme from 15 baht at the end of last year, mainly because a drought has reduced output in top producer Argentina. The Soybean and Rice Bran Oil Processors Association has sought government permission to export about 250,000 tonnes of meal over the next three to four months to pare down stocks, said president Vichit Vitayatanagorn.
He said producers had been unable to offload the meal locally because animal feed producers are reluctant to purchase it. Feed makers blame government regulations intended to protect soybean farmers.
Local animal feed producers are obliged to buy domestic soybean meal at the world market price plus a 2 percent tariff, said Pornsil Patchrintanakul, president of the Thai Feed Mill Association.
Soybean oil producers had asked for the 2 percent tariff earlier, saying they had to pay soybean farmers at prices guaranteed under a crop insurance scheme.
However, Mr. Pornsil maintains the 2 percent tariff is no longer needed as most of the soybeans used domestically are imported.
Thailand has to import soybeans as local production is not sufficient to meet local processors' demand, mainly from the cooking oil industry. Last year, the country imported 1.87 million tonnes of soybeans, mainly from Brazil, Argentina, and the United States.
The Agriculture Ministry forecasts imports will rise to more than 2 million tonnes this year.
Cooking oil manufacturers can also earn income from selling soybean meal. However, futures prices of soybeans in foreign markets have been on upward trend, averaging US$481.40 a tonne in December compared with $378 in 2009.
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