Thai corn prices steady, large stock seen carried over

Thai corn prices held steady on Tuesday but could dip over the next week due to continued slack demand for exports, traders said. Domestic corn, a major ingredient in poultry feed, was steady at 5.50 baht per kg ($143 per tonne) on Tuesday from last week. "Trade has been sluggish for almost a month because our corn could not compete against other cheaper origins," said Thavee Tantiponganand of the Tanyaphan trading firm.
"As Argentina is aggressively selling long forward contracts, we expect our trade to continue slow for the next couple of months."
Thai corn export prices were offered steady at $145 per tonne, free-on-board (FOB) on Tuesday, unchanged from last week.
Argentine corn was $135 per tonne, cost-and-fright (C&F) in Southeast Asia on Tuesday.
Thailand is expected to ship no more than 20,000 tonnes of corn this month with most of it destined for Vietnam and Malaysia, traders said.
Thailand is estimated to have around 700,000-800,000 tonnes of corn left unshipped from the 2004/05 crop year ending June 2005, corn traders said.
Traders estimate Thailand's corn output in the 2004/05 July-June crop year at 4 million tonnes.
The 2003/04 harvest was 4.3 million tonnes.
Thailand's corn exports in the July-June crop year is estimated at around 800,000-900,000 tonnes, traders said.
Between July 1 and December 30, Thailand shipped 651,522 tonnes, figures from traders showed.
Thailand shipped 850,000 tonnes in the previous year.
Since Thailand confirmed an outbreak of bird flu last January, domestic demand for corn has halved, with feed millers buying only 200,000 tonnes a month, traders said.
The recent findings of fresh bird flu outbreaks in three provinces last week have not hit domestic feed demand, traders said.
"Demand has been steady. It is not getting worse, but not yet better," said one trader.
Thailand, where 12 people were killed by Asia's bird flu last year, said on Monday it would step up efforts to halt the spread of the killer virus after it erupted again in nearby Vietnam and killed at least nine people in three weeks.
Chicken meat cost 34 baht per kg on Tuesday, up from 20 baht quoted late last year due to higher domestic demand, especially prior to Chinese New Year, which falls in early February, traders said.
Thailand was the world's fourth biggest chicken exporter before the first outbreak of bird flu last January crippled exports to key buyers Japan and Europe.
Thailand has been raising only 8-9 million chicken a week, down from 14 million last January and 20 million before the epidemic struck.