Equity Analysis /

Thailand: Agro & Food - Reopening to boost Thai livestock prices to new highs

  • Reopening to boost Thai livestock prices in Nov

  • High season to underpin livestock prices in 1H22

  • Domestic corn and SBM prices start to retreat

Prasit Sujiravorakul
Prasit Sujiravorakul

Equity Research Analyst

Bualuang Securities
19 November 2021

We are bullish on “livestock” segment in 2022 in anticipation of fatter livestock margins bolstered by strong bounces in Thai and overseas pork and chicken prices and significant declines in raw material prices. We prefer “chicken” to “pork” in view of the greater scope for an upside for the average prices in 2022. The huge livestock loss in 3Q21 is likely to be followed by reduced loss in 4Q21 and a turnaround in 2022. Our top pick in “livestock” sub-sector is GFPT. The second-tier picks are CPF and TFG. We recommend accumulating the stocks upon their price weakness. 

Reopening to boost Thai livestock prices in Nov

The live chicken price in Chonburi province surged robustly 39% within the first half of Nov (from Bt31/kg on Nov 1 to Bt43/kg during Nov 15-18) while that in Nakhon Pathom province bounced 17% during the same period (from Bt30/kg on Nov 1 to Bt35/kg during Nov 15-18). That of Bangkok rose 14% (from Bt29.5/kg on Nov 1 to Bt33.5/kg during Nov 15-18). The day-old chick price spiked 32% (from Bt9.25/bird on Nov 1 to Bt12.25/bird during Nov 15-18). Moreover, the live pig prices in Bangkok and two provinces bounced 5% from Bt74-76/kg on Nov 1 to Bt78-80/kg during Nov 8-18. We attribute the surge in Thai chicken and pork prices to the reopening in Nov which has spurred domestic meat consumption from retail consumer segment and industrial segment (such as horeca and food services). Higher overseas meat consumption as a result of greater reopening in Japan and Europe in late-3Q21 through 4Q21 will underpin stronger demand for Thai chicken exports. Hhgfhf