Thailand Cuts Soymeal Tariffs

WASHINGTON - Mar 19/08 - SNS -- Thailand's Ministry of Commerce agreed to cut the soybean meal tariff from 4% to zero to reduce local animal feed costs, reports the U.S. agricultural attache for the country.

However, this proposal recommends the tariff be waived on a year-by-year basis to avoid any long-term negative impact to domestic producers and soybean oil crushers. Thailand is already dependent upon soybean imports, which account for around 70% of the annual soybean meal used in the feed industry (3 million tons). Argentina and Brazil are the leading suppliers, accounting for nearly 90% of total soybean meal imports. This tariff reduction is subject to Cabinet approval, which is scheduled to meet on the proposal next week.

The tariff reduction of soybean meal is expected to lower overall feed production costs by one%, as the soybean meal accounted for around 30% of total raw materials used in feed production. Over half of all soybean meal is used in poultry feed, followed by swine feed (30%), and aquaculture feed (10%). This reduction is seen primarily beneficial for swine production, where rising pork prices have been a growing concern in Thailand. Swine production costs will likely decrease by 38 baht/pig ($1.2/pig), while poultry costs are expected to fall by 0.3 baht/bird ($0.01/bird).

The tariff reduction request for other raw materials of animal feed, including Distilled Dried Grains with Soluble (DDGS), is being considered by the Thai Finance Ministry.