Thai corn prices are likely to rise further this week as strong overseas demand offsets slow domestic sales hit by bird flu, traders said on Tuesday.
Domestic corn, a major ingredient in poultry feed, was offered on Tuesday at 5.26 baht/kg ($135/tonne), up from last week's 5.1, but exporters said they had plenty to sell to overseas buyers.
"We could end up having as much as 400,000 tonnes of corn for export between April and June" due to weak demand from the feed industry, said Thavee Tantiponganand of the Tanyaphan exporting firm.
The harvest season for the 2003/04 (July-June) corn crop has ended and the new harvest will not start until July, traders said.
But rice farmers have started harvesting an estimated 100,000 tonnes of corn grown as a sideline, they said.
Local traders also had stocks of corn bought before the bird flu crisis and they were struggling to find buyers as feed-millers have stopped buying corn.
Thailand produces around 4.2 million tonnes of corn a year, enough to satisfy feed millers, but imports almost two million tonnes of soyameal a year, mainly for feed.
Poultry exporters have stopped raising new chickens since the bird flu outbreak was confirmed on January 23.
No new cases have been reported this month and all former "red zones" where poultry was culled within a five km (three-mile) radius of an outbreak are under a 21-day surveillance.
Government officials say they hope chicken raising could start again in April, but traders said it could be longer than that because the virus is very difficult to contain.
Thailand, the world's fourth largest chicken exporter, usually raises around 20 million chickens a week.
Its major markets are Japan and the European Union. Both have banned imports of Thai frozen chicken products, but Japan has just allowed the resumption of cooked chicken from four Thai plants.
The EU did not ban imports of cooked chicken. Last year, Japan took 60 percent of Thailand's 60 billion baht ($1.54 billion) of chicken exports, with cooked chicken accounting for 30 percent.
Overseas demand for Thai corn has been strong, with 130,000 tonnes being loaded at ports, mainly for South Korea, traders said.
"Toepfer, Cargill, Noble Grains and Cremer Asia Trade are the trading houses actively trading Thai corn," said one exporter.
Thai corn for export was offered at $155/tonne FOB.
Thailand is not a major corn exporter. It depended on corn imports until 2000, but shipped half a million tonnes in 2001.
Sales in 2002 dropped to 150,000 tonnes, but rose slightly to 200,000 tonnes last year.
Traders predict overseas sales will top 500,000 tones this year.
Thailand's soyabean and meals trade has been sluggish.
"One soyabean importer has cancelled a contract with Noble Grains trading firm to buy 13,500 tonnes of US soyabeans," a trader said.