Required Report - public distribution

**Date:** 3/18/2004

**GAIN Report Number:** TH4034

TH4034

**Thailand**

**Grain and Feed**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Rodrick McSherry, Agricultural Counselor

U.S. Embassy, Bangkok

**Prepared by:**

Ponnarong Prasertsri, Agricultural Specialist

**Report Highlights:**

Thailand\'s major grain production will likely increase in MY 2004/05.
However, exports of rice in MY 2004/05 are expected to be slightly down
from this year\'s record level. MY 2003/04 rice exports are estimated to
reach all time high of 8.0 million metric tons, due to tight exportable
supplies among major competitors. Also, corn exports will likely reach
400,000 metric tons, due to an unexpectedly larger available export
supply following the HPAI outbreak-triggered reduction in domestic
demand for feed corn. Moreover, domestic demand for feed wheat is also
adversely affected by the U.S.\'s shrimp anti-dumping investigation.
However, human consumption demand for wheat-based products reportedly
continued to grow.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Unscheduled Report

Bangkok \[TH1\]

\[TH\]

#  

[Executive Summary 3](#executive-summary)

[1. Rice 4](#rice)

[1.1 Production 4](#production)

[1.2 Consumption 4](#consumption)

[1.3 Trade/Competition 4](#tradecompetition)

[1.4 Policy 5](#policy)

[Statistical Tables 8](#statistical-tables)

[Table 1.1: Thailand's Production, Supply and Demand for Rice
8](#table-1.1-thailands-production-supply-and-demand-for-rice)

[Table 1.2: Wholesale Prices for Rice
9](#table-1.2-wholesale-prices-for-rice)

[Table 1.3: Thailand's Rice Exports
10](#table-1.3-thailands-rice-exports)

[Table 1.4: Thailand's Rice Imports
11](#table-1.4-thailands-rice-imports)

[2. Corn 12](#corn)

[2.1 Production 12](#production-1)

[2.2 Consumption 12](#consumption-1)

[2.3 Trade 12](#trade)

[2.4 Policy 13](#policy-1)

[Statistical Tables 14](#statistical-tables-1)

[Table 2.1: Thailand's Production, Supply and Demand for Corn
14](#table-2.1-thailands-production-supply-and-demand-for-corn)

[Table 2.2: Wholesale Price of Corn
15](#table-2.2-wholesale-price-of-corn)

[Table 2.3 Thailand's Corn Imports
16](#table-2.3-thailands-corn-imports)

[Table 2.4: Thailand's Corn Exports
17](#table-2.4-thailands-corn-exports)

[3. Wheat 18](#wheat)

[3.1 Production 18](#production-2)

[3.2 Consumption 18](#consumption-2)

[3.3 Trade 19](#trade-1)

[3.4 Policy 19](#policy-2)

[Statistical Tables 21](#statistical-tables-2)

[Table 3.1: Thailand's Production, Supply and Demand for Wheat
21](#table-3.1-thailands-production-supply-and-demand-for-wheat)

[Table 3.2: Thailand's Wheat Grain Imports
22](#table-3.2-thailands-wheat-grain-imports)

[Table 3.3: Thailand's Wheat Flour Imports
23](#table-3.3-thailands-wheat-flour-imports)

[4. Beans 24](#beans)

[4.1 Production 24](#production-3)

[4.2 Consumption 24](#consumption-3)

[4.3 Trade 24](#trade-2)

[4.4 Policy 24](#policy-3)

[Statistical Tables 25](#statistical-tables-3)

[Table 4.1: Thailand's Production, Supply and Demand for Beans
25](#table-4.1-thailands-production-supply-and-demand-for-beans)

[Table 4.2: Farm Gate Prices of Mung Beans
26](#table-4.2-farm-gate-prices-of-mung-beans)

[Table 4.3: Thailand's Mung Bean Exports
27](#table-4.3-thailands-mung-bean-exports)

[Table 4.4: Thailand's Mung Bean Imports
28](#table-4.4-thailands-mung-bean-imports)

#  

# Executive Summary

In MY 2004/05, rice production is estimated to increase slightly to 27.1
million metric tons (17.9 million metric tons milled equivalent), due
mainly to continued attractive price-led expansion in planted area and
yield improvement. However, rice exports will slow down from the
previous year's anticipated record 8.0 million metric tons to 7.8
million metric tons, following the return of the major competitors from
their tight supply situations in MY 2003/04. Export prices will likely
remain strong.

As for corn, MY 2004/05 production is expected to grow slightly, in
response to area expansion, following attractive prices. Domestic demand
for feed corn is forecast to recover gradually, as bird flu comes under
control. In MY 2003/04, partially due to an anticipated sharp reduction
in domestic demand for feed corn due to the HPAI outbreaks, corn will
likely be shifted to the export market in anticipation of strong demand
from Malaysia, Taiwan, and possibly Korea. Corn exports are expected to
reach a record 400,000 metric tons.

MY 2004/05 wheat consumption will continue its upward trend in response
to the growing human consumption of wheat-based products. Meanwhile,
feed demand for feed wheat is forecast to increase slightly, following a
gradual recovery in shrimp exports to the U.S. market after an
anti-dumping petition against shrimp imports from Thailand and elsewhere
was filed with the U.S. government at the end of the first half of MY
2003/04. The anti-dumping investigation that will occur during the
second half of MY 2003/04 will likely result in an initial sharp
contraction in Thai shrimp exports, with a rebound expected in MY
2004/05 due to attractiveness of Thai shrimp over other imported shrimp.

MY 2004 pulse production is forecast to increase slightly in response to
area expansion, as farmers in some areas will likely shift from their
second paddy crops to Mung beans, following low levels of water. Mung
bean exports are expected to continue their downward trend, due to
strong competition from relatively cheaper Burmese beans.

# 1. Rice

## 1.1 Production 

![](media/image2.wmf){width="5.993055555555555in"
height="1.2444444444444445in"}MY 2004/05 paddy production is forecast to
increase slightly to 27.1 million metric tons (17.9 million metric tons
milled equivalent), mainly in response to the anticipated increase in
average yield, given normal weather conditions. Farmers are expected to
utilize more fertilizer and to take good care of their farms, due to the
continued attractive prices, which are averaging at around 5,080
baht/ton for 5% grade paddy in CY 2003, as compared to 4,840 baht/ton in
the previous year. However, the likelihood of dry weather conditions is
reportedly a major concern among traders, and will be closely monitored.

![](media/image3.wmf){width="5.990972222222222in"
height="0.9388888888888889in"}

In MY 2003/04, paddy production has been revised downward slightly to
26.8 million metric tons (17.7 million metric tons milled equivalent),
mainly due to poor rainfall, but remained higher than the previous
year's production of 26.1 million metric tons. The delay and poor
distribution of rain resulted in a drop in the average yield of the main
paddy crop, particularly in the Northeastern region, a major area for
fragrant paddy. Fragrant paddy production is forecast to decline
slightly to 5.0 million metric tons, as compared to approximately 5.3
million metric tons the previous year. However, the conversion rate of
head rice of main paddy crop is reportedly excellent at around 45
percent, as compare to around 38 percent in the previous year, due to
the dryness during harvest period. As a result, the supply of broken
rice is expected to be tight, leading to an anticipated surge in prices.
Also, the relatively low level of water in major dams has limited the
expansion in planted areas of second crop, despite current attractive
farm prices.

## 

## 1.2 Consumption

Despite the increasing trend of wheat-based food consumption, rice
remains the dominant food among the Thai people. According to the
National Statistic Office, average household expenditures on rice are
accounted for about 99 percent on total rice and flour expenditures.
Annual per capita consumption of rice remains at about 110 kilograms.

## 1.3 Trade/Competition

MY 2004/05 rice exports will likely slow down to 7.8 million metric
tons, in anticipation of the return of the major competitors from their
tight supply situations in the previous year. In MY 2003/04 rice exports
are conservatively forecast to increase to the all time high of 8.0
million metric tons, reaching the official target, due to an anticipated
tight supply situation among the major competitors, in particular
Vietnam, and also the major producing countries like China. Trade
sources reported that Thai rice should gain market share in Africa and
Asia at the expense of Vietnamese rice. Export demand is reportedly
expected to be aggressive during the first half of the year. Also, South
American countries, including Brazil and Chile continued to import Thai
rice, due to cheaper prices compared to U.S. rice. However, exports to
South American countries are limited by current freight costs. The tight
global supply situation has put more upward pressure on export prices.
Average export prices of 100% B grade white rice during the first two
months increased by 7.3 percent to around US\$ 220/ton, FOB Bangkok.
Trade sources expected that prices had bottomed out and are now on an
upward trend for the rest of the year.

MY 2002/03 rice exports continued to increase by 4.9 percent to a record
7.6 million metric tons, of which 2.3 million metric tons are fragrant
rice, which recovered from the previous year's exports of 1.7 million
metric tons. The better than expected export performance reflected the
return of South American demand, in particular from Brazil and Chile, to
which Thailand exported up to 329,582 metric tons, mainly 100% B grade
white rice, at the expense of U.S. rice. The increase resulted from the
relatively cheaper prices of Thai rice, compared to the U.S. rice,
including transportation costs, due to low levels of rice stocks in the
U.S. Additionally, the surge of exports to Indonesia in December 2003 in
advance of the country's ban on rice importation in the beginning of CY
2004 also contributed to the increase. However, exports to Africa and
the Middle East declined slightly, due mainly to competitive prices from
Vietnam. Meanwhile, exports of fragrant rice to Africa and the Middle
East increased significantly to 772,323 metric tons and 57,558 metric
tons, as compared to 453,326 metric tons and 38,698 metric tons in the
previous year, respectively.

As for rice imports, demand for imported rice increased noticeably to
7,346 metric tons in CY 2003, as compared to only 368 metric tons in the
previous year. Rice imports from China accounted for the bulk of the
increase. Official sources reported that about 75 percent of imported
rice was short-grain rice, and the rest was Basmati rice from India and
Pakistan, and glutinous rice from Laos. The imported short grain rice
from China is reportedly of superior quality, which is normally sold in
the premium market segment as table rice for the Japanese and Korean
markets in Thailand, as compared to the locally produced short grain
rice, which is used mainly as a raw material in specific flour
industries (Japanese rice flour), and produced mostly under contract.

## 1.4 Policy 

The government policy remains focused on the paddy mortgage scheme.
Despite more flexibility in the program this year, fewer farmers
participated, as market prices were higher than the mortgage program
intervention prices. The 2003/04 mortgage scheme for main paddy,
extending from November 1, 2003 to March 15, 2004, planned to buy 9.0
million metric tons of paddy -- 5.0 million metric tons of fragrant
paddy, 3.0 million metric tons of non-fragrant paddy and 1 million
metric tons of glutinous paddy. As of Mar 14, 2004, the program had
bought 2.4 million metric tons of main crop paddy which included 0.2
million metric tons of fragrant paddy, 2.1 million metric tons of
non-fragrant paddy, and 0.05 million metric tons of glutinous paddy. In
addition, the intervention prices for the 2004 second crop paddy
mortgage scheme has been set higher by about US\$ 12/ton from the
previous year's level, as follows: US\$ 129/ton for 100% grade paddy;
US\$ 127/ton for 5% grade; US\$ 124/ton for 10% grade; US\$ 122/ton for
15% grade; and US\$ 116/ton for 25% grade (exchange rate: 39.50
Baht/US\$ 1.00).

On import policies, the Ministry of Commerce has announced the annual
import quota for rice at 249,757 metric tons for CY 2004, following the
WTO agreement on market access. In CY 2003, rice imports totaled 7,346
metric tons, up significantly from 368 metric tons in the
![](media/image4.wmf){width="6.5in"
height="6.248611111111111in"}previous year. Most imports are short grain
rice, which is from China (6,713 metric tons).

![](media/image5.wmf){width="5.648611111111111in"
height="3.1798611111111112in"}

![](media/image6.wmf){width="5.533333333333333in"
height="3.216666666666667in"}

## Statistical Tables

### Table 1.1: Thailand's Production, Supply and Demand for Rice

+------------------+-------+-------+-------+-------+-------+-------+
| **PSD Table**    |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| **Country**      | **    |       |       |       |       |       |
|                  | Thail |       |       |       |       |       |
|                  | and** |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**    | **    |       |       |       | (1000 |       |
|                  | Rice, |       |       |       | HA)   |       |
|                  | Mil   |       |       |       | (1000 |       |
|                  | led** |       |       |       | MT)   |       |
+------------------+-------+-------+-------+-------+-------+-------+
|                  | 2002  |       | 2003  |       | 2004  |       |
|                  |       |       |       |       |       |       |
|                  | Re    |       | Est   |       | For   |       |
|                  | vised |       | imate |       | ecast |       |
+------------------+-------+-------+-------+-------+-------+-------+
|                  | USDA  | Post  | USDA  | Post  | USDA  | Post  |
|                  | Off   | Est   | Off   | Est   | Off   | Est   |
|                  | icial | imate | icial | imate | icial | imate |
|                  | \[    | \[    | \[    | \[    | \[    | \[    |
|                  | Old\] | New\] | Old\] | New\] | Old\] | New\] |
+------------------+-------+-------+-------+-------+-------+-------+
| **Market Year    |       | 01    |       | 01    |       | 01    |
| Begin**          |       | /2003 |       | /2004 |       | /2005 |
+------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested   | 9990  | 10158 | 10300 | 10636 | 0     | 10670 |
+------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks | 2401  | 2477  | 2103  | 2156  | 1703  | 1656  |
+------------------+-------+-------+-------+-------+-------+-------+
| Milled           | 17124 | 17198 | 17800 | 17700 | 0     | 17900 |
| Production       |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| Rough Production | 25945 | 26058 | 26970 | 26818 | 0     | 27121 |
+------------------+-------+-------+-------+-------+-------+-------+
| MILLING RATE     | 6600  | 6600  | 6600  | 6600  | 0     | 6600  |
| (.9999)          |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Imports    | 0     | 0     | 0     | 0     | 0     | 0     |
+------------------+-------+-------+-------+-------+-------+-------+
| Jan-Dec Imports  | 0     | 0     | 0     | 0     | 0     | 0     |
+------------------+-------+-------+-------+-------+-------+-------+
| Jan-Dec Import   | 0     | 0     | 0     | 0     | 0     | 0     |
| U.S.             |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY     | 19525 | 19675 | 19903 | 19856 | 1703  | 19556 |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Exports    | 7500  | 7597  | 8000  | 8000  | 0     | 7800  |
+------------------+-------+-------+-------+-------+-------+-------+
| Jan-Dec Exports  | 7500  | 7597  | 8000  | 8000  | 0     | 7800  |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.       | 9922  | 9922  | 10200 | 10200 | 0     | 10400 |
| Consumption      |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks    | 2103  | 2156  | 1703  | 1656  | 0     | 1356  |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL            | 19525 | 19675 | 19903 | 19856 | 0     | 19556 |
| DISTRIBUTION     |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+

### 

###  

### Table 1.2: Wholesale Prices for Rice

  --------------- ------------ ------------------ --------- --------- ---------
  **Prices                                                            
  Table**                                                             

  **Country**     Thailand                                            

  **Commodity**   Rice, Milled                                        

  Prices in       Baht         per uom            Kg                  

                  (Wholesale                                          
                  Price in                                            
                  Bangkok for                                         
                  New Crop WR                                         
                  100 B)                                              

  Year            2002         2003               \% Change           

  Jan             8.07         8.24               2%                  

  Feb             8.25         8.32               1%                  

  Mar             7.87         8.06               2%                  

  Apr             7.97         8.07               1%                  

  May             8.33         8.14               -2%                 

  Jun             8.28         8.26               0%                  

  Jul             7.82         8.06               3%                  

  Aug             7.67         7.79               2%                  

  Sep             7.63         7.66               0%                  

  Oct             7.82         7.41               -5%                 

  Nov             7.77         7.34               -6%                 

  Dec             7.77         7.59               -2%                 

                                                                      

  Exchange Rate   39.5         Local Currency/US                      
                               \$                                     

  Date of Quote   3/4/2004     MM/DD/YYYY                             
  --------------- ------------ ------------------ --------- --------- ---------

### Table 1.3: Thailand's Rice Exports

  ----------------------- ---------------- ----------------- -------------
  **Export Trade Matrix**                                    

  **Country**             Thailand                           

  **Commodity**           Rice, Milled                       

  Time Period             Jan. - Dec.      Units:            Metric Tons

  Exports for:            2002                               **2003**

  U.S.                    282444           U.S.              307561

  Others                                   Others            

  Nigeria                 967596           Nigeria           546068

  Senegal                 777632           Senegal           556762

  Indonesia               697352           Indonesia         763690

  Iran                    397441           Iran              490181

  Cote D\'Ivoire          343492           Cote D\'Ivoire    351340

  South Africa            317198           South Africa      420236

  China                   299557           China             254501

  Hong Kong               267750           Hong Kong         280818

  Malaysia                266159           Malaysia          316396

  Singapore               254497           Singapore         270501

  Total for Others        4588674                            4250493

  Others not Listed       2374520                            3039361

  Grand Total             7245638                            7597415
  ----------------------- ---------------- ----------------- -------------

### Table 1.4: Thailand's Rice Imports

  ------------------------- ------------------ ------------- -------------
  **Import Trade Matrix**                                    

  **Country**               Thailand                         

  **Commodity**             Rice, Milled                     

  Time Period               Jan. - Dec.        Units:        Metric Tons

  Imports for:              2002                             **2003**

  U.S.                      17                 U.S.          20

  Others                                       Others        

  China                     161                China         6713

  Australia                 54                 Australia     321

  Pakistan                  64                 Pakistan      66

  Japan                     42                 Japan         19

  India                     22                 India         24

  Italy                     9                  Italy         11

  Laos                      0                  Laos          171

                                                              

                                                              

                                                              

  Total for Others          352                              7325

  Others not Listed         16                               21

  Grand Total               368                              7346
  ------------------------- ------------------ ------------- -------------

#  2. Corn

## 2.1 Production

In MY 2004/05, despite the drop in feed demand for poultry triggered by
the outbreak of Highly Pathogenic Avian Influenza (HPAI), corn
production is estimated to increase to 4.3 million metric tons, up
slightly from the previous year in line with the increase in planted
area, due to the current attractive farm price. Trade sources reported
that the export market could absorb the impact from a reduction in feed
demand. The cultivation of the main corn crop is expected to start late
this year, due to the concerns over the likelihood of dry weather
conditions. However, official sources reported that no evidence for a
return of the El Nino phenomenon, normally bringing drought to Thailand
could be seen at this early stage.

In MY 2003/04, corn production is revised downward to 4.2 million metric
tons, down slightly from the previous year. The decline mainly resulted
from a reduction in planted area, as farmers reportedly shift towards
crops with better returns, in particular tapioca. Meanwhile, the average
yield for corn improved slightly to 3.8 tons/hectare, due to favorable
weather conditions during the flowering stage.

## 

## 2.2 Consumption

MY 2004/05 corn consumption is forecast to recover gradually from the
contraction of feed demand this year due to the HPAI outbreak. Trade
sources reported that domestic demand for chicken meat consumption,
which accounts for about 60 percent of total poultry production, will
likely be on track soon. However, the export of chicken meat will grow
moderately during the transition period.

MY 2003/04 corn consumption has been revised downward to 3.8 million
tons, down 0.4 million metric tons from the previous year, due to the
HPAI outbreak. The severe disease outbreak, which started in
mid-November 2003, spread across the major poultry growing areas
rapidly, as the government was slow to respond. As a result, poultry
farms, in particular boiler farms, suffered heavy casualties. MY 2003/04
poultry production will likely contract by 15-20 percent from the
previous year, due to the government's depopulation program and
cooperation among integrated operations to stop farming at a certain
point in the year to break the hold of the disease, and from the
contraction in the chicken meat export market due to import bans placed
by the major importers, which came when the Thai government confirmed
the HPAI outbreak on January 23, 2004. Hence, domestic demand for feed
corn will be adversely affected by the slump in poultry population, as
feed corn accounts for about 60 percent of poultry feed demand. In turn,
poultry feed corn demand drives total feed corn demand, taking 70-80% of
total feed corn demand.

## 2.3 Trade

MY 2004/05 corn exports will likely slow down in response to a smaller
exportable supply, following a gradual recovery in domestic demand for
feed corn. Usually, domestic corn supply is mostly limited to local use,
due to the increasing demand resulting from the continued expansion in
poultry production capacity, prior to the HPAI outbreak. Trade sources
expect a gradual upturn in chicken meat exports, as the outbreak comes
to be controlled and negotiations with governments of buying countries,
which banned the imports of Thai chicken meat, open up more markets. MY
2004/05 chicken exports are expected to increase gradually from a sharp
contraction in the previous year, in anticipation of growing exports of
cooked products.

MY 2003/04 corn exports are revised upward to 400,000 metric tons, up
significantly from the previous year. Trade sources reported that their
feed corn stocks were unexpectedly excessive, in particular for feed
millers. As a result, they have to shift to export markets, especially
those in Asian countries. Some millers have reportedly got export deals
with Malaysia, Taiwan, and also Korea, at around US\$ 130-135 /ton, FOB.
Trade sources reported that Thailand has not sent feed corn to Korea for
more than a decade, since 1991, due mainly to limited exportable
supplies, following the continued strong domestic demand from the
export-driven expansion of poultry farms.

As for corn imports, demand for imported corn is estimated to be
marginal in MY 2003/04 and MY 2004/05 due to anticipated excess supply
of locally produced corn, following the HPAI outbreak. In CY 2003, corn
imports declined significantly, reflecting self-sufficiency in domestic
production.

## 

## 2.4 Policy

Due to anticipated strong domestic prices in MY 2003/04, the government
has not implemented a mortgage scheme, but focused instead on the
administration of a minimum tariff rate quota. The import quota in CY
2004 is 54,700 metric tons at a 20 percent in-quota tariff rate,
following the WTO agreement. Shipment is allowed only during the period
of March 1 -- June 30, 2004. Meanwhile, out of-quota imports are subject
to a 73 percent tariff rate with a surcharge of 180 baht/ton. The
non-WTO countries, on the other hand, are subject to 2.75 baht/kg, and a
special charge of 10.22 percent (sum of both of these charges is close
to 73 percent) plus a surcharge of 180 baht/kg. In addition, following
the Summit Meeting on Economic Cooperation Strategy, which is for
cooperation between Cambodia, Lao, Burma, and Thailand, imports of feed
corn from these countries by the other countries during March 1 -- June
30, 2004 are duty free. The sub-committee on animal feed raw material
supervision will determine the amount that can be imported. As for AFTA
countries, imports are subject to a 5 percent tariff rate without any
surcharge.

## Statistical Tables

### Table 2.1: Thailand's Production, Supply and Demand for Corn

+------------------+-------+-------+-------+-------+-------+-------+
| **PSD Table**    |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| **Country**      | **    |       |       |       |       |       |
|                  | Thail |       |       |       |       |       |
|                  | and** |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**    | **C   |       |       |       | (1000 |       |
|                  | orn** |       |       |       | HA)   |       |
|                  |       |       |       |       | (1000 |       |
|                  |       |       |       |       | MT)   |       |
+------------------+-------+-------+-------+-------+-------+-------+
|                  | 2002  |       | 2003  |       | 2004  |       |
|                  |       |       |       |       |       |       |
|                  | Re    |       | Est   |       | For   |       |
|                  | vised |       | imate |       | ecast |       |
+------------------+-------+-------+-------+-------+-------+-------+
|                  | USDA  | Post  | USDA  | Post  | USDA  | Post  |
|                  | Off   | Est   | Off   | Est   | Off   | Est   |
|                  | icial | imate | icial | imate | icial | imate |
|                  | \[    | \[    | \[    | \[    | \[    | \[    |
|                  | Old\] | New\] | Old\] | New\] | Old\] | New\] |
+------------------+-------+-------+-------+-------+-------+-------+
| **Market Year    |       | 07    |       | 07    |       | 07    |
| Begin**          |       | /2002 |       | /2003 |       | /2004 |
+------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested   | 1134  | 1134  | 1150  | 1110  | 0     | 1128  |
+------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks | 244   | 422   | 70    | 279   | 80    | 229   |
+------------------+-------+-------+-------+-------+-------+-------+
| Production       | 4200  | 4250  | 4400  | 4200  | 0     | 4265  |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.   | 10    | 5     | 10    | 0     | 0     | 0     |
| Imports          |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Imports  | 10    | 4     | 10    | 0     | 0     | 0     |
+------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Import   | 0     | 0     | 0     | 0     | 0     | 0     |
| U.S.             |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY     | 4454  | 4677  | 4480  | 4479  | 80    | 4494  |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.   | 284   | 148   | 100   | 400   | 0     | 250   |
| Exports          |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Exports  | 137   | 120   | 150   | 500   | 0     | 200   |
+------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.        | 4000  | 4200  | 4200  | 3780  | 0     | 3900  |
| Consumption      |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.       | 4100  | 4250  | 4300  | 3850  | 0     | 4000  |
| Consumption      |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks    | 70    | 279   | 80    | 229   | 0     | 244   |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL            | 4454  | 4677  | 4480  | 4479  | 0     | 4494  |
| DISTRIBUTION     |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+

### Table 2.2: Wholesale Price of Corn

  ---------------------- ----------- ------------------------ ------------
  **Prices Table**                                            

  **Country**            Thailand                             

  **Commodity**          Corn                                 

  Prices in              Baht        per uom                  Metric Ton

                                                              

  Year                   2002        2003                     \% Change

  Jan                    4380        4720                     8%

  Feb                    4480        4880                     9%

  Mar                    4850        5060                     4%

  Apr                    4950        5050                     2%

  May                    5120        4980                     -3%

  Jun                    5030        5000                     -1%

  Jul                    4810        5020                     4%

  Aug                    4440        4980                     12%

  Sep                    4400        4760                     8%

  Oct                    4540        4800                     6%

  Nov                    4630        4970                     7%

  Dec                    4560        4930                     8%

                                                              

  Exchange Rate          39.5        Local Currency/US \$     

  Date of Quote          3/4/2004    MM/DD/YYYY               
  ---------------------- ----------- ------------------------ ------------

### Table 2.3 Thailand's Corn Imports

  ----------------------- ---------------- ---------------- --------------
  **Import Trade Matrix**                                   

  **Country**             Thailand                          

  **Commodity**           Corn                              

  Time Period             Jan. - Dec.      Units:           Metric Tons

  Imports for:            2002                              **2003**

  U.S.                    2068             U.S.             364

  Others                                   Others           

  South Africa            1655             South Africa     409

  Lao Rep.                1117             Lao Rep.         592

  Argentina               48               Argentina        511

                                                             

                                                             

                                                             

                                                             

                                                             

                                                             

                                                             

  Total for Others        2820                              1512

  Others not Listed       30                                2

  Grand Total             4918                              1878
  ----------------------- ---------------- ---------------- --------------

### Table 2.4: Thailand's Corn Exports

  ----------------------- ---------------- --------------- --------------
  **Export Trade Matrix**                                  

  **Country**             Thailand                         

  **Commodity**           Corn                             

  Time Period             Jan. - Dec.      Units:          Metric Tons

  Exports for:            2002                             **2003**

  U.S.                    1                U.S.            0

  Others                                   Others          

  Malaysia                69200            Malaysia        22550

  Taiwan                  25042            Taiwan          16421

  Singapore               4480             Singapore       1653

  Indonesia               31150            Indonesia       7400

  Sri Lanka               3964             Sri Lanka       1648

  Burma                   958              Burma           255

  Hong Kong               2304             Hong Kong       528

  China                   80               China           0

  Japan                   304              Japan           574

                                                            

  Total for Others        137482                           51029

  Others not Listed       8566                             1236

  Grand Total             146049                           52265
  ----------------------- ---------------- --------------- --------------

# 3. Wheat

## 3.1 Production 

MY 2004/05 wheat production remained stable at 500-600 metric tons, far
below the consumption need. Expansion in production is constrained by
climatic conditions, low quality, and unattractive returns. Major
planted areas are in the Northern region, particularly Mae Hong Son
province, covering about 80 percent of the totaled planted area (160
hectare). The average yield is approximately at 150-180 kg/rai (0.9-1.1
tons/hectare)

## 

## 3.2 Consumption

MY 2004/05 wheat consumption is forecast to continue its upward trend in
line with wheat demand for human consumption, in particular for bakery
products and noodles. Major manufacturers of branded products have
reportedly expanded their production capacity for high potential
products in response to anticipated growing demand. However, wheat
demand for feed use is expected to increase only slightly during the
transition period after the shrimp anti-dumping duties are finalized. An
anti-dumping case against shrimp imports has been filed by the U.S.
shrimp industry. The U.S. Southern Shrimp Alliance filed an anti-dumping
petition on December 31, 2003 against the imports of frozen and canned
shrimp from six countries, including Thailand (17% market share), China
(11%), Brazil (5%), Ecuador (9%), Vietnam (10%), and India (12%). These
countries are accused of selling their shrimp in their home countries at
prices between 32-349% higher than they sell them in the U.S. Trade
sources expected that Thai shrimp will likely be more competitive if the
duty charged to Thailand is lower than other competitors, as Thai shrimp
exports to the U.S. are of higher quality and price. Exporters are
reportedly afraid of anticipated backdated duties (90 days, starting
March 10, 2004). U.S. officials are due to decide whether shrimp have
been unfairly dumped at below market prices by the end of the year (June
8, 2004), and to determine appropriate anti-dumping duties. In general,
feed wheat is mainly used in shrimp feed, accounting for about 6 percent
of total animal feed consumption. Feed wheat reportedly covers about
25-30 percent of shrimp feed composition.

MY 2003/04 wheat consumption is revised downward slightly, due mainly to
the contraction in demand for feed consumption, following the
anticipated decline in shrimp exports as a result of the uncertainty
during the process of the U.S.'s anti-dumping investigation. Despite an
increase in shrimp exports by 33 percent in the first half of the year,
MY 2003/04 exports are forecast to decline by 7 percent, as shrimp
exports are reportedly expected to fall by 50 percent in the second half
of the year. Thailand's shrimp exports to the U.S. accounted for nearly
half of total shrimp exports.

Meanwhile, human consumption of wheat, accounting for about 60-70
percent of total wheat consumption, continued to increase, mainly in
line with the growing demand for bakery products. Trade sources reported
that overall bakery demand (accounting for about 35-40 percent of total
wheat demand for human consumption), in particular bread items, grew
about 10 percent, due to the expansion in numbers of bakery outlets in
the modern trade stores, along with bread product diversification.
Noodle consumption (about 30-35 percent of total wheat demand for human
consumption) grew only slightly from the previous year, far below the
average of 5 percent target growth of major manufactures of instant
noodles, due partly to stagnant demand for their conventional products.
Also, demand for biscuits (about 5 percent of total wheat demand for
human consumption) reportedly continued to grow by 5 percent, due to
strong demand from border trade, despite an anticipated slowdown in
domestic market.

As for the wholesale price of wheat flour, traders are reportedly more
concerned over the upward price pressures which are expected to increase
by 5 percent from the current level, following anticipated increases in
wheat and transportation costs. At present, the wholesale price of wheat
flour remained unchanged from the previous year's level. Prices of bread
flour (13.5-14.0% protein content) are about 500 baht/22.5 kg. bag (26
U.S.cent/pound), followed by 500-530 baht/bag (26-27U.S. cent/pound) for
cake flour, 370-400 baht/bag (19-20 cent/pound) for all purpose flour
(mainly noodle), and 310-320 baht/bag (16 U.S.cent/pound) for biscuit
flour.

## 3.3 Trade

Wheat imports are crucial in Thailand, due to the marginal domestic
production. MY 2004/05 imports of wheat are estimated to increase
further in anticipation of growing consumer demand for wheat-based
products. Trade sources reported that U.S. wheat, with its superior
quality, would likely have high market potential, as the market
opportunity for different kinds of bakery items remains strong.

MY 2003/04 import demand for wheat has been revised downward to 800,000
metric tons, down slightly for the second consecutive year. The decline
resulted from the contraction in feed demand for wheat, and current high
levels of stocks on hand. In the first half of MY 2003/04, wheat grain
imports totaled 461,962 metric tons, up 9 percent from the same period
in the previous year. U.S. wheat imports, which accounted for about 45
percent of total wheat imports, increased by 21 percent, followed by
Australia (41 percent) with 188,794 metric tons, up 31 percent; and
Canada (14 percent) with 64,764 metric tons, down 38 percent. In CY
2003, wheat imports totaled 781,517 metric tons, down 11 percent from
the previous year, mainly in response to slowdowns in economic
activities caused by Severe Acute Respiratory (SARS) in the first half
of the year. Imports of U.S. wheat amounted to 354,834 metric tons, down
7 percent from the previous year. However, the market share of U.S. and
also Australian wheat continued to increase to 45 percent and 43 percent
of total wheat grain imports in CY 2003, respectively, as compared to 43
percent and 32 percent in CY 2002, respectively, at the expense of
Canadian wheat, of which the production was of a record low.

As for wheat flour, in the first half of MY 2003/04 imports totaled
25,760 metric tons (38,744 metric tons grain equivalent), down 9 percent
from the same period in the previous year. Major suppliers were Japan,
covering 31 percent of total wheat flour imports, followed by Singapore
with 20 percent, China with 16 percent, and Malaysia with 11 percent.
The market share of Chinese wheat flour continued to increase
considerably for the second consecutive year from a marginal share in
the previous year to 16 percent of the Thai market in the first half of
MY 2003/04, due mainly to relatively cheaper prices. However, its
quality is reportedly inferior. Trade sources reported that most Chinese
wheat flour is used in shrimp feed composition. In CY 2003, wheat flour
imports amounted to 47,873 metric tons, down 17 percent from the
previous year, due mainly to the sluggish demand in the first half of
the year and price competition from local flour.

## 3.4 Policy

Regarding the recent restructuring of tariffs by the Thai Government for
the purpose of strengthening the competitiveness of domestic
manufactures and to resolve discrepancies in the import tariff
structure, the tariff for wheat was reduced from 1.0 baht/kg. to 0.10
baht/kg. Also, the tariff for wheat flour is reduced from 40 percent on
C&F prices (2.75 baht/kg.) to 25.5 percent (1.85 baht/kg). The reduction
was announced October 2, 2003 and became effective on October 4, 2003.
In addition, by January 1, 2005, the tariff rate on wheat flour will be
further reduced to 5 percent (0.50 baht/kg).

Trade sources expected that the reduction in the wheat flour tariff will
adversely affect the sales of their low premium items, biscuit flour in
particular, due to current strong competition from imported flour, as
there is no brand loyalty for this item. All domestic flour mills are
reportedly selling their biscuit flour at prices close to their break
even points, 310-320 baht/bag (16 U.S. cent/pound), as compared to costs
of 300-305 baht/bag (15 U.S. cent/pound). Moreover, by January 2005 when
the tariff reduction schedule of imported flour will be fully
implemented, the prices of local biscuit flour could be lowered by 27
baht/bag (1.4 U.S. cent/pound) down from the prices in place prior to
the tariff reduction, assuming other production costs unchanged, and a
25 percent loss in the milling process. Meanwhile, imported wheat flour
could be reduced by 50.63 baht/bag (2.6 U.S. cent/pound).

As for higher premium items, such as bakery flour, the shift to imported
flour is reportedly limited by necessary, minimum quality standards and
also the after sale services provided by quality wheat exporters. Trade
sources reported that bakery products, in particular those from the
brand name bakeries, are more sensitive to flour quality than to the
price of flour. As a result, the impact on the prospects of U.S. wheat
imports is expected to be marginal.

## Statistical Tables

### Table 3.1: Thailand's Production, Supply and Demand for Wheat

+------------------+-------+-------+-------+-------+-------+-------+
| **PSD Table**    |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| **Country**      | **    |       |       |       |       |       |
|                  | Thail |       |       |       |       |       |
|                  | and** |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**    | **Wh  |       |       |       | (1000 |       |
|                  | eat** |       |       |       | HA)   |       |
|                  |       |       |       |       | (1000 |       |
|                  |       |       |       |       | MT)   |       |
+------------------+-------+-------+-------+-------+-------+-------+
|                  | 2002  |       | 2003  |       | 2004  |       |
|                  |       |       |       |       |       |       |
|                  | Re    |       | Est   |       | For   |       |
|                  | vised |       | imate |       | ecast |       |
+------------------+-------+-------+-------+-------+-------+-------+
|                  | USDA  | Post  | USDA  | Post  | USDA  | Post  |
|                  | Off   | Est   | Off   | Est   | Off   | Est   |
|                  | icial | imate | icial | imate | icial | imate |
|                  | \[    | \[    | \[    | \[    | \[    | \[    |
|                  | Old\] | New\] | Old\] | New\] | Old\] | New\] |
+------------------+-------+-------+-------+-------+-------+-------+
| **Market Year    |       | 07    |       | 07    |       | 07    |
| Begin**          |       | /2002 |       | /2003 |       | /2004 |
+------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested   | 0     | 0     | 0     | 0     | 0     | 0     |
+------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks | 306   | 408   | 223   | 398   | 193   | 351   |
+------------------+-------+-------+-------+-------+-------+-------+
| Production       | 0     | 0     | 0     | 0     | 0     | 0     |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.   | 895   | 808   | 900   | 800   | 0     | 850   |
| Imports          |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| Jul-Jun Imports  | 895   | 808   | 900   | 800   | 0     | 850   |
+------------------+-------+-------+-------+-------+-------+-------+
| Jul-Jun Import   | 402   | 319   | 0     | 320   | 0     | 330   |
| U.S.             |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY     | 1201  | 1216  | 1123  | 1198  | 193   | 1201  |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.   | 78    | 8     | 80    | 7     | 0     | 10    |
| Exports          |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| Jul-Jun Exports  | 78    | 8     | 80    | 7     | 0     | 10    |
+------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.        | 350   | 275   | 350   | 270   | 0     | 280   |
| Consumption      |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.       | 900   | 810   | 850   | 840   | 0     | 920   |
| Consumption      |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks    | 223   | 398   | 193   | 351   | 0     | 271   |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL            | 1201  | 1216  | 1123  | 1198  | 0     | 1201  |
| DISTRIBUTION     |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+

### Table 3.2: Thailand's Wheat Grain Imports

  ---------------------- --------------- ------------------ -------------
  **Import Trade                                            
  Matrix**                                                  

  **Country**            Thailand                           

  **Commodity**          Wheat           (Wheat Grain)      

  Time Period            Jan. - Dec.     Units:             Metric ton

  Imports for:           2002                               **2003**

  U.S.                   379709          U.S.               354834

  Others                                 Others             

  Australia              285234          Australia          335994

  Canada                 208489          Canada             84183

  India                  3318            India              5372

                                                             

                                                             

                                                             

                                                             

                                                             

                                                             

                                                             

  Total for Others       497041                             425549

  Others not Listed      419                                1134

  Grand Total            877169                             781517
  ---------------------- --------------- ------------------ -------------

### Table 3.3: Thailand's Wheat Flour Imports

# 4. Beans

## 4.1 Production

MY 2004 pulse production is forecast to increase slightly in
anticipation of an expansion in cultivated areas. The expansion is the
result of the switch from second paddy crop to alternative crops in some
areas, where the level of water is critical. As for MY 2003, the Thai
Agricultural Ministry estimate for Mung bean production is 251,000
metric tons, down 2.7 percent from the previous year, due to
unattractive returns, as compared to other crops, which has led to a
reduction in planted areas. Also, the average yield is virtually
unchanged from the previous year at around 0.85 ton/hectare. Trade
sources reported that the production cost for Thai beans is twice as
high as that of Burmese beans, as the harvest process is labor intensive
and Thai labor costs are much higher than Burmese labor costs.

## 4.2 Consumption

In MY 2004, bean consumption will likely increase moderately, in line
with the growing economy. Most Mung beans are reportedly raw material
for vermicelli, bean sprouts, bean flour and cakes, and various
confectionary products. Also, Mung beans are used in animal feed, in
particular for birds. Feed demand for Mung beans is forecast to decline
slightly, due to the HPAI outbreaks, as for corn.

The average farm gate price of Mung beans declined sharply by 17 percent
in MY 2003. Trade sources reported that the price depression reflected
more plentiful supplies of imported beans from Burma.

## 4.3 Trade

MY 2004 Mung bean exports are forecast to continue their downward trend
to 15,000 metric tons, due to strong price competition from Burma and
China. In MY 2002, Mung bean exports declined by 23 percent from the
previous year. The contraction in Thailand's major export market, in
particular India, Sri Lanka, the U.S., and Cambodia, accounted for the
bulk of the decline. Trade sources reported that Burmese beans have
gained more market share at the expense of Thai beans, due to their
relatively cheaper price. Thailand's imports of Burmese beans increased
significantly in MY 2002, also due to the price differential.

## 4.4 Policy

The Thai government does not intervene in or subsidize Mung bean
production because it is a minor crop, as compared to other field crops
or paddy.

## Statistical Tables

### Table 4.1: Thailand's Production, Supply and Demand for Beans

  ------------------- -------------- ---------- ---------- ---------- ---------- ----------
  **PSD Table**                                                                  

  **Country**         **Thailand**                                               

  **Commodity**       **Beans**                                       (1000      
                                                                      HA)(1000   
                                                                      MT)        

                      2002           Revised    2003       Estimate   2004       Forecast

                      USDA Official  Post       USDA       Post       USDA       Post
                      \[Old\]        Estimate   Official   Estimate   Official   Estimate
                                     \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]

  **Market Year                      01/2002               01/2003               01/2004
  Begin**                                                                        

  Area Harvested      270            304        285        293        0          295

  Beginning Stocks    19             19         19         19         19         18

  Production          230            258        250        251        0          250

  TOTAL Mkt. Yr.      0              0          0          1          0          1
  Imports                                                                        

  Jul-Jun Imports     0              0          0          1          0          1

  Jul-Jun Import U.S. 0              0          0          0          0          0

  TOTAL SUPPLY        249            277        269        271        19         269

  TOTAL Mkt. Yr.      24             24         35         18         0          15
  Exports                                                                        

  Jul-Jun Exports     20             21         30         14         0          13

  Feed Dom.           5              5          5          5          0          4
  Consumption                                                                    

  TOTAL Dom.          206            234        215        235        0          240
  Consumption                                                                    

  Ending Stocks       19             19         19         18         0          14

  TOTAL DISTRIBUTION  249            277        269        271        0          269
  ------------------- -------------- ---------- ---------- ---------- ---------- ----------

### Table 4.2: Farm Gate Prices of Mung Beans

  -------------------- ------------ ------------------------ ------------
  **Commodity**        Beans                                 

  Prices in            Baht         per uom                  Metric Ton

                                                             

  Year                 2002         2003                     \% Change

  Jan                  13650        10350                    -24%

  Feb                  13860        9050                     -35%

  Mar                  14100        9650                     -32%

  Apr                  13200        9360                     -29%

  May                  13540        9360                     -31%

  Jun                  12110        9360                     -23%

  Jul                  12910        9360                     -27%

  Aug                  12960        10980                    -15%

  Sep                  13370        11230                    -16%

  Oct                  12280        11710                    -5%

  Nov                  11110        13350                    20%

  Dec                  10530        13890                    32%

                                                             

  Exchange Rate        39.5         Local Currency/US \$     

  Date of Quote        3/4/2004     MM/DD/YYYY               

                                                             
  -------------------- ------------ ------------------------ ------------

### Table 4.3: Thailand's Mung Bean Exports

  ------------------------ ----------------- --------------- -------------
  **Export Trade Matrix**                                    

  **Country**              Thailand                          

  **Commodity**            Beans                             

  Time Period              Jan. - Dec.       Units:          Metric Ton

  Exports for:             2002                              **2003**

  U.S.                     2761              U.S.            2137

  Others                                     Others          

  Cambodia                 1620              Cambodia        593

  Hong Kong                1604              Hong Kong       1631

  India                    5092              India           3156

  Indonesia                575               Indonesia       3156

  Japan                    1389              Japan           1188

  Malaysia                 618               Malaysia        1036

  Pakistan                 1481              Pakistan        131

  Philippines              1187              Philippines     1532

  Singapore                1111              Singapore       1005

  Sri Lanka                3839              Sri Lanka       1685

  Total for Others         18516                             15113

  Others not Listed        2562                              1198

  Grand Total              23839                             18448
  ------------------------ ----------------- --------------- -------------

### Table 4.4: Thailand's Mung Bean Imports

  ------------------------ ----------------- -------------- --------------
  **Import Trade Matrix**                                   

  **Country**              Thailand                         

  **Commodity**            Beans                            

  Time Period              Jan. - Dec.       Units:         Metric Ton

  Imports for:             2002                             **2003**

  U.S.                     1                 U.S.           0

  Others                                     Others         

  Burma                    0                 Burma          914

  Malaysia                 0                 Malaysia       110

  Indonesia                0                 Indonesia      23

  China                    0                 China          26

                                                             

                                                             

                                                             

                                                             

                                                             

                                                             

  Total for Others         0                                1073

  Others not Listed        0                                0

  Grand Total              1                                1073
  ------------------------ ----------------- -------------- --------------

End of Report.