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Published on March 6, 2008

Without the reduction, animal-feed manufacturers claim they would soon be forced out of businesses because of the government's policy to restrain the price of goods in spite of cost-push factors.

Duties of 5-9 per cent for maize, soybean and fishmeal have imposed high burdens on manufacturers as maize and soybean are also in high demand to produce alternative energy.

The association also called on the government to revise its plan to help consumers and use other measures than controlling prices, saying that such controls would soon effect on farmers and employment.

"The government should allow product prices to increase in line with rising raw materials prices, otherwise feed-mill producers will soon shut down as a result of losses from the current prices," said Pornsilp Patcharintanakul, president of the association.

Some producers have already cut back and laid off workers.

About 100 feed-mill producers in the industry touche more than 4 million families or 20 million workers, mainly in agricultural sectors that support the feed-mill industry.

Feed-mill enterprises have not been allowed to hike prices since 2004, despite raw-material costs rising by more than 30 per cent over the same period last year.

The industry produces 11 million tonnes worth Bt130 billion a year. Normally supply increases by 5-7 per cent annually but rising material costs and a shortage of finance in the industry will cause flat growth this year.

Without a price increase, some feed-mill operators, mainly SMEs, would close this year. Manufacturers of feed for dairy cows will be the first to shut down as they face huge losses from higher raw-material prices.

Feed-mill enterprises have been asking for the ministry's approval for price increases of 10-20 per cent since late last year but have been refused.

Members of the association will also march to meet Commerce Minister Mingkwan Sangsuwan and ask him to urgently consider their proposal.

Costs to feed mills have risen by more than 30 per cent because of rising demand for fuel crops in the world market.

The prices of fuel crops, which are also used for animal-feed production, have jumped significantly since 2003.

Petchanet Pratruangkrai

The Nation