(Bloomberg) -- Thailand's feed industry is pitching to buy about $2.8 billion worth of agricultural commodities annually from the US instead of other suppliers, as the Southeast Asian nation seeks to narrow its $35 billion trade surplus and head off possible tariffs on its own exports.
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The Thai Feed Mill Association is in talks with the government to ease some rules to make US feedstuffs like soybean meal and corn more competitive to ship in, Pornsil Patchrintanakul, president of the organization, told Bloomberg News in an interview.
Thailand joins a number of nations scrambling to find ways to reduce their trade surpluses with the US, as President Donald Trump wields the threat of tariffs to reshape his country's relations with trade partners. Countries like India and South Korea are considering boosting their purchases of US energy, while Thailand has already promised to buy more US ethane.
A move to reduce or remove a 2% import tax on US soybean meal, potentially via a trade pact, could immediately incentivize Thai feed mills to switch their purchases from Brazil, Pornsil said. A temporary suspension of WTO-mandated tariffs on corn will also favor supply from the US, the world's largest producer and exporter of the commodity, he added.
"We're so open to buying more, but you have to fix these problems for us first. If it works, we'll make the US a priority," Pornsil said, adding that importing more American crops is one of the quickest actions his country can take to reduce its trade surplus.
Feed mills under the association have the capacity to buy from the US up to 48 billion baht ($1.4 billion) of soybean meal, 36 billion baht of corn, and 9.9 billion baht of ethanol by-product -- a total of $2.8 billion of crops every year, according to data compiled by the association. Thailand currently brings in $68.2 million of American soybean meal and other crops, but no US corn.
Last week, Prime Minister Paetongtarn Shinawatra ordered relevant government agencies to study measures to protect Thailand's trade interest in the new Trump era, according to government spokesman Jirayu Houngsub. A working group set up last month was tasked with preparing negotiation strategies and will be making recommendations to the cabinet in due course, Jirayu said on Feb. 11.