Thailand Opens Soybeans Market Under the WTO Context
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According to the forecast of the Thai Office of Agricultural Economics, Thailand is expected to have 81,190 rai of Soybean planting areas (1 rai = 1,600 square meters) in 2023, producing 22,252 tons, having an average yield of 274 kilograms per rai, with the main production areas being Chiang Mai, Mae Hong Son, Khon Kaen, Chaiyaphum, etc.
While the average demand for Soybean is between 3.4 and 3.5 million tons per year, causing the Thai Soybean industry to rely on imports for more than 99% of its demand, with Brazil being the primary source of imports. Therefore, to create food security, the Office of the National Economic and Social Development Board collaborated with the Thai Soybean Food Producers Trade Association, driving prototype projects to increase productivity and reduce the cost of Soybean cultivation in Chiang Mai and Mae Hong Son Province in November 2022.
Experts participated in explaining the project to promote Soybean planting in the dry season in Chiang Mai and Mae Hong Son Provinces. Farmers are interested in participating in the project, totaling 30 rai in Muang District, Mae Hong Son Province. The project started in December 2022. The association will support seeds and organic fertilizers to increase secondary nutrients and micronutrients for farmers participating in the project by setting goals to raise the Soybean yield to an average of not less than 400 kilograms per rai.
On November 29th, the Cabinet meeting resolved to approve the opening of the market and the administration of Soybean imports under the WTO framework for three years (2023 – 2025), unlimited amount, 0% tariff rate, and other trade frameworks to comply with the obligations.
According to AgFlow data, Thailand imported 2.4 million tons of Soybeans from Brazil in 2022, followed by the United States (0.35 million tons). In 2020, Thailand imported Soybeans worth $1.48 billion, becoming the 6th largest importer of Soybeans in the world. In the same year, Soybeans were Thailand’s 17th most imported product. Thailand imports Soybeans primarily from: Brazil ($916M), the United States ($532M), Canada ($24.9M), France ($3.43M), and Cambodia ($2.79M).
Thailand’s Soybean Price
In terms of the management of Soybean products, those who have the right to import Soybean seeds from all eight associations are willing to support and promote production and buy all domestic Soybeans at market prices but not lower than the minimum price according to the quality class which is a price level that increased in the period 2020 – 2022 by another 2.25 baht per kilogram (from the original 18.75 – 21.00 baht per kilogram to 21.00 – 23.25 baht per kilogram according to quality class).
It is forecasted that Thailand’s Soybean import prices will align with Soybean market prices. The world and the Thai baht tend to be weak, so the Thai Research Center estimates that the price of Soybean imports from Thailand will remain high this year. Thai Soybean import prices are expected to be $600-700/ton.
The demand for Soybeans is expected to grow, especially the primary demand from the Soybean processing business, such as Soybean oil, to feed the needs of downstream customers, both the household sector and the food service business. Both the restaurant/tourism business and services segment and demand from the crude oil export market are projected to continue to receive orders, reflecting continued growth in demand for Soybeans. It is seen that entrepreneurs will face rising costs, including the cost of raw materials (imported Soybeans) and other production costs in the country that tend to increase, such as energy (electricity-transportation), labor costs, etc.
Other sources: AGRINEWSTHAI
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