Thailand: Soybean Milk Processors Add Capacity by 20%
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Thailand’s Soybean production is marginal at 50,000 – 60,000 metric tons. Farmers have no incentive to expand Soybean acreage due to unattractive returns compared to other field crops like corn and cassava. Also, the Thailand Government still bans cultivating all transgenic or biotech plants, including Soybeans. Moreover, the Government did not provide any direct financial assistance, especially for the price guarantee program that other field crops receive, other than the domestic purchase requirement for those who want to import Soybeans.
Around 70 percent of Soybeans are crushed for cooking oil. There are four active Soybean crushers in Thailand, which are (1) Thai Vegetable Oil (TVO), (2) Thanakorn Vegetable Oil Products (TVOP), (3) Porn Amnuay Sup Vegetable Oil, and (4) Industrial Enterprise Co., Ltd. Besides the sales of cooking oil products, the most significant portion of crushers’ revenue is the sales of byproducts from the Soybean crushing process, especially for Soybean meal for animal feed.
The Government forecasts the Thai economy to grow by 3.6 percent in 2023 and 3.8 percent in 2024, driven by the expected increase in foreign tourists to 28 million in 2023 and 35 million in 2024, which are close to 40 million foreign tourists before the COVID outbreak in 2019. Similarly, the Post forecast MY2023/24 Soybean crushing demand to increase by around 4 percent in anticipation of growing domestic cooking oil consumption and demand for Soybean meal in poultry and swine feed in line with recovery in the hotel and service sector.
MY2022/23 Soybean crushing demand is expected to decline around 6 percent from MY2021/22 in anticipation of reduced domestic consumption of Soybean cooking oil. Consumers shifted to palm oil in the first half of MY2022/23 as palm oil prices fell to normal levels, which were 25 percent cheaper than Soybean oil. The Ministry of Industry’s Office of Industrial Economics (OIE) reported that Soybean oil consumption in the first five months of MY2022/23 declined 28 percent from last year.
Soybean crushing demand for cooking oil increased around 3 percent in MY2021/22, which was well above the slow economic recovery of 1.6 percent in 2021 and 2.6 percent in 2022 due to strong domestic demand for Soybean cooking oil. According to AgFlow data, Thailand imported 210,276 tons of Soybeans from Brazil in Jan-Mar 2023, followed by the US (53,920 tons). Consumers substituted Soybean oil for palm oil as domestic prices of palm oil reached a record high in the first half of 2022 due to tight global supplies caused by Russia’s invasion of Ukraine. According to the OIE, palm oil consumption in MY2021/22 declined 12 percent from MY2020/21.
Soybean Use in Thailand
Soybeans used in beverage and processed food production are trending upwards, especially for soymilk and soy sauces. Demand for food-quality Soybeans in drink and processed food account for approximately 8 percent of total Soybean consumption. Soy milk reportedly accounts for 30-40 percent of the total UHT milk market, up from around 15 percent over the past two decades, following the healthy drink trend. Industrial sources expect Thailand’s soymilk per capita consumption to be 12 liters, compared to 18 liters of cow’s milk, which is far below the global per capita average of 113 liters of cow’s milk.
MY2022/23 and MY2023/24 food-quality Soybean demand for beverage and processed food production is expected to grow around 4 percent annually, driven by strong exports of soy sauces and recovery in domestic soymilk consumption. Also, one of the largest soymilk manufacturers reportedly expanded the production capacity of soymilk by approximately 20 percent in 2023. Meanwhile, MY2021/22 food-quality Soybean demand increased by around 2 percent. This is lower than expected due to reduced exports of soy sauces by 22 percent in MY2021/22, which hindered the consumption growth of Soybean in soymilk production, which grew by around 3 percent.
Other sources: USDA
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