Poultry prices on the rise in Thailand

It has been reported that an increase in animal feed prices of 20% will result in food prices - both for the domestic market and export - increasing by 5-10%, says CP Intertrade CEO Pornslip Patcharintanakul.

Because of the uncertain animal feed costs, CP, one of the largest chicken and shrimp exporters in Thailand, will raise export prices for its chicken products and not take orders for more than three months in advance.

“Fortunately, the higher costs are being experienced equally everywhere in the world and, to maintain their share of international markets, animal farmers and exporters must control other costs by introducing new technology,” says Patcharintanakul, adding that the situation will intensify if Thailand does not have a clear policy of controlling agricultural output for food and energy.

Patcharintanakul says a recommendation would be if Thai companies were able to contract crop production to farmers in neighbouring countries. Thailand currently imports about 100,000 tonnes per year from Laos, Cambodia and Burma, though the import volume of soybeans remains small.

This farming contract, however, does not go without risks, he says: “When oil prices climb further, what if the neighbouring countries introduced a requirement that crop output must be converted into ethanol before being exported to Thailand, so as to reap additional benefits? That would mean even fewer raw materials for animal feed!”

Ultimately, the higher food costs will make 2008 a tough year for Thailand's food exports, says Patcharintanakul, adding that there is the danger of a “drop in consumption”.