4th Apr: SINGAPORE - Asian soymeal demand is likely to remain stable over the next several months, as poultry consumption slowly returns to normal levels in several bird flu-affected countries in the region, analysts said Tuesday.
Considering major consumers of feed meal such as Japan, South Korea, Taiwan and the Philippines aren't yet affected by the epidemic, there is even a chance of demand being higher than last year, they said.
In China, where there were reports of the outbreak in several provinces this year, feed consumption is beginning to pick up, albeit slowly.
Soymeal is largely used as poultry feed in China and other Asian countries.
Although most Chinese soybean crushers are still making losses, soymeal prices have currently risen to CNY2,210-CNY2,250/ton from around CNY2,100-CNY2,200/ton in early December. Prices came under pressure in December after more than a dozen bird flu cases were reported in November.
Soymeal sales so far this year are still around 30% lower on year, but sales have picked up in the last few weeks, as China didn't report any new cases of bird flu among poultry since the end of February, traders said.
"We are counting on soymeal demand rising in April. But, if more bird flu cases are reported, I can't imagine what will happen," said the sales manager of a major crusher in China's Shandong province.
Thailand, Vietnam To Consume More Feed
In Thailand, soymeal demand is expected to rise by 5%-6% on-year as government measures to control the spread of the outbreak have eased fears among the public to consume poultry products.
Thailand consumed around 4.5 million tons of soymeal in 2005.
"People in Thailand are learning to live with bird flu. Unlike two years ago when bird flu outbreak hit poultry demand hard, in 2006, the situation is quite different," said Chevee Wises, manager of Thai Feedstuff Users' Promotion Association.
Besides rising domestic demand for poultry products, Thailand has also started to export cooked chicken, which has helped support demand for feedmeal.
Despite the expected 5%-6% rise in domestic demand, overall imports this year are likely to be around 1.8 million tons, the same level as in 2005.
Meanwhile, in Vietnam, soymeal demand is soaring because of the country's growing catfish exports to the European Union.
"While bird flu has really hit poultry consumption in Vietnam, the rise in catfish exports to Europe, as more people switch to eating fish as a safer alternative to chicken, has boosted soymeal demand," said a trader in a Hanoi-based multinational trading firm.
The trader said Vietnam imported 130,000 tons of soymeal in March, its highest monthly imports ever, compared with just 60,000 tons imported in February.
"Even in April, Vietnam may import up to 100,000 tons of soymeal," the trader said.
Indonesian Feed Demand Seen Unchanged On Year
In Indonesia, which has been affected by the epidemic for the last several years, demand for poultry remains subdued, though people are still consuming poultry products.
But traders don't expect any sharp fall in Indonesia's soymeal imports this year.
"I think soymeal imports will be around 1.5 million tons, unchanged from last year. Demand doesn't seem to be any different so far in 2006, from last year," said an analyst in a Jakarta-based multinational trading house.
The prospects for demand in India and Malaysia are also dull, as India faces its first-ever bird flu outbreak while Malaysia has been reeling under renewed pressure since February.
India so far has detected bird flu in three districts since Feb. 18 this year.
"While domestic soymeal demand hasn't really suffered much so far, fresh orders from poultry farms have slowed and if more bird flu cases are detected, demand may take a hit," said D.R. Kalra, executive director of the Solvent Extractors' Association of India.
"We are really watching the emerging bird flu scenario carefully and at this moment it's not certain how the bird flu situation plays out in coming months," added Kalra.
India consumes around 2 million tons of soymeal annually.
Malaysian demand has also been hit over the last one month as new bird flu cases were detected in some provinces.
"Demand for soymeal came down by at least 20% on-year last month as poultry sales have taken a hit," said the purchasing manager of a Penang-based feedmill.
He said demand can pick up again over the next few months if no new cases of the epidemic are reported in April.