4.1 Feed supply and demand
The supply of raw materials for poultry production, particularly grain and protein, has
become a key issue determining the growth – and possibly competitive strength – and
future of the industry. The Thai Feed Mill Association estimates that a total of 3.52 million
tonnes of maize and 1.63 million tonnes of soybean were used to feed broiler and layer
chickens in 2007 (Table 9). The amount required would be much more in the future should
the industry grow back to the pre-HPAI level of production – which would be easily attainable.
Shortage of local feed ingredients has made the industry reliant in part on imported
feeds. In addition to the feed costs, some agricultural products are under tariff quota protection.
For example, while the import duty on soybean meal in quota is a mere 4 percent,
the “out of quota” import duty is prohibitively high – at 119 percent. Although the tariff quota has been lifted, all importers are required to buy domestic soybean proportionately
to their purchase of imported soybean at a guaranteed price which is usually higher than
the imported price.
As many agricultural product exporting countries, including Thailand, have been promoting
biofuel production, a large proportion of grain (such as maize) and tuber (such as
cassava), as well as sugarcane production, has been diverted toward gasohol and bio-diesel
production – pushing the prices of animal feeds significantly upwards. Table 10 shows that
the maize price has increased significantly, and the price of soybean price has also tended
to rise. Although the impact of rising feed prices on the competitiveness of Thailand’s poultry
sector is unclear – as this worldwide phenomenon could also affect competitors – it is
very plausible that the growth rate of the sector will not be as strong as in the past.