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Thai corn tax hits Xayaboury exporters
Produce traders in Xayaboury province are feeling the pinch after the Thai government suddenly imposed import tax on corn recently, leaving thousands of tonnes stranded in Lao warehouses as buyers refuse to pay the hike.
The Thai Trade Department applied a tax rate of 73 percent on corn imported outside of fixed quotas applied to Thai importers, while that imported within the quotas is subject to 19 percent tax, according to a report from Xayaboury Commerce and Industry Department.
Department Head Mr Somdy Souksavath said Thai firms could normally import Lao corn tax free.
“Of course Thai businesses won't buy corn from Laos if they have to pay such high taxes,” he said.
Thailand is Xayaboury province's largest market for agricultural exports, followed by Vietnam and China, while some of the corn grown in the province is sold locally.
The province exports a range of agricultural produce including Job's tears, cassava and beans, but corn is by far the biggest earner.
Agricultural exports from Xayaboury province to Thailand totalled over U$26 million in fiscal year 2009-10, of which corn made up about U$25 million.
So far this year the province has sold almost 6,000 tonnes of corn to Thailand.
But since the tax hike, which also affects cassava, orders have abruptly ceased, swelling warehouse corn stocks to 260,000 tonnes.
Fortunately farmers had already harvested the crop when the tax took effect, but traders are worried their stocks may spoil.
“What the middlemen are concerned about is that their corn will go mouldy and rot,” said Mr Khamxaylao Luetesa, Head of the Import-Export Section of Xayaboury Commerce and Industry Department.
Xayaboury businesswo-man Ms Phoumjai, who buys produce for export to Thailand, said she could no longer sell corn across the border.
“Now I just buy very small volumes of corn from farmers to sell for feed to a few chicken farms in the province,” she said.
The Xayaboury depart-ment reported that the Thai authorities would cancel import tax from March 1 to June 30, leaving traders with an anxious wait to see if their stock will still be sellable.
The province also exports to China and Vietnam, but at much reduced volumes due to high transportation costs.
vientiane times
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