Thailand Pledges Million Dollars for Corn Insurance
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Corn is an important economic crop in Thailand that has been used for domestic consumption and exported for a long time, primarily feed industry which helps generate income for farmers each year. Most farmers cultivate Corn for two seasons: Rainy season Corn is planted during March – October. And harvest the produce around June – January of the following year. And dry season Corn planting will start in November – February of the next year and harvested during March – April.
The USDA forecast for MY2021/22 Corn production remains unchanged at 5.3 million tons, down a 4 percent reduction from MY2020/21 due to reduced off-season Corn acreage. Available water supplies and favorable weather conditions encouraged farmers to turn to other crops during the off-season period that has lower maintenance costs and higher returns, such as off-season rice, sugar cane, and cassava. Also, the lack of incentives or price support programs for off-season Corn planting discouraged farmers from planting Corn. Farmers also face problems purchasing agricultural inputs, such as Corn seeds and fertilizers.
The farm-gate prices of Corn were 10.37 baht/kilogram ($287/ton) in July 2022, which is 25 percent higher than last year. Moreover, average farm-gate prices of Corn between January and July 2022 were around 9.7 baht/kilogram ($285/ton), up 27 percent from the 5-year average price. The USDA revised its forecast for Thailand’s Corn production in MY 2022/23 to 5.2 million tons in anticipation of reduced Corn acreage.
The country imported 1.8 million tons of Corn in 2021, up from 1.6 million tons in 2020. Usually, import flows go high in April-December. Corn imports totaled 0.91 million tons in the first nine months of MY2021/22, down 20 percent from last year. Around 97 percent of MY2020/21 imported Corn came from Burma. Imports of Corn from the Association of Southeast Asian Nations (ASEAN) countries are duty-free with an unlimited quota between February 1 and August 31. Despite facing zero tariffs during this period, several other challenges reduced Corn imports for Thailand.
In 2020, Thailand imported Corn worth $285M in Corn, becoming the 32nd most significant importer of Corn in the world. Thailand imports Corn primarily from: Burma ($239M), Cambodia ($28.1M), Laos ($4.95M), the United States ($4.5M), and India ($2.82M). In contrast, Thailand exported Corn worth $75M in the same year, making it the 30th largest exporter of Corn in the world. The largest market was Pakistan ($18.2M), followed by Burma ($15.9M), Vietnam ($11M), Ecuador ($6.86M), and Sri Lanka ($5.38M).
Thai Government Policy for Corn
The Thai cabinet approved the 2022 main- and off-season Corn crop insurance program on May 3, 2022. The program pledges 224 million baht ($6.5 million) and will cover 2.12 million rai (0.34 million hectares) of Corn acreage. BAAC (Bank for Agriculture and Agricultural Cooperatives) will manage the program. The program will cover damage caused by seven natural disasters: flooding/heavy rains, drought, storms, cold, hail, fires, and wild elephants.
The cabinet also approved an increase in the feed Corn import quota to 600,000 tons between May 10 and July 31, 2022. The original import quota was 54,000 tons under the WTO commitment. In addition, the Government allowed both Public Warehouse Organization (PWC) and private importers to import feed Corn duty-free from the initial tariff rate quota of 20 percent. This temporary measure aims to alleviate high feed ingredient costs caused by the Russia-Ukraine War. Feed mills and the livestock industry have been requesting these measures since late March when import prices of feed ingredients surged to record highs in a decade.
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