Thai corn prices are expected to dip over the next few days with demand still weak from a domestic poultry industry battered by persistent bird flu, traders said on Tuesday. Bird flu has already hit domestic sales of corn, a major ingredient in poultry feed, because poultry exporters are raising fewer chickens since the outbreak struck at the end of 2003. "Local traders are facing difficulty finding buyers with demand from feedmillers remaining low as the bird flu situation has not improved, yet exports are slow," said one trader.
"They are sitting on an estimated one million tonnes of corn in stock bought from farmers." Since the bird flu outbreaks first began, domestic demand for corn has almost halved, with feed millers buying no more than 200,000 tonnes a month.
Domestic corn was selling at 5.5 baht per kg ($144 per tonne) on Tuesday, unchanged from a week ago. More than 100 corn traders were due to gather in the north-eastern province of Nakhon Ratchasima on Tuesday to discuss the glut, said one trader at the meeting. In the latest, third, the H5N1 virus has hit outbreak, 15 of Thailand's 76 provinces.
Thailand was the world's fourth largest chicken exporter before bird flu arrived and crippled exports to key buyers Japan and Europe. Thailand exported 219,316 tonnes of poultry products in 2004, down 60 percent from 545,987 tonnes in 2003, figures from the Thai Broiler Processing Association showed.
Leading buyers stopped buying Thai raw poultry products, but they are buying cooked chicken.
Thailand has 66 poultry processing houses, of which 45 have been approved by the European Union as complying with its standards for cooked poultry imports from Thailand. The association set a 2005-export target for cooked poultry products of 350,000 tonnes, up from 193,179 shipped in 2004.
Trade has been thin with very few deals done. A Vietnamese feedmill bought 7,000 tonnes of corn from Thailand over the past week, traders said. "I have sold the corn through one Japanese trading house at $154 per tonne including cost and freight," said Thavee Tantiponganand of the Tanyaphan trading firm.
The corn was to be sent to the northern port of Haiphong for April-May shipment, Thavee said. Thai corn for export was steady at $138 per tonne on a free-on-board basis, excluding freight costs, on Tuesday. Chinese corn was offered steady at $150 per tonne, including cost and freight to Southeast Asia. Two corn exporting firms, Tanyaphan and Thanasombat, bid to buy 34,801 tonnes of corn from the government stock a week ago at between 4.40 and 4.80 baht per kg, traders said.
The Commerce Ministry, which conducted the auction, had yet to make a decision on the sale of the corn bought from farmers under a state intervention scheme at 5 baht per kg, traders said. The soyabean and meal trade has been sluggish over the past week, with some importers seeking meal for April shipment, traders said.
Traders said Argentine high-protein soyameal was offered at almost $258-259 per tonne C&F for April shipment, up from $245 offered a week ago. Domestic soyameal was steady around 11.70 baht per kg.
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