Thai Shrimp Association to cut production

Shrimp farmers' clubs under the association have agreed to the reduc¬tion, which would result in Thailand's shrimp production dropping from 490,000 tonnes this year to 392,000 tonnes next year.

As the world's biggest shrimp pro¬ducer, Thailand must work to not only stabilise domestic and export prices, but also help farmers survive. Thai shrimp farmers have already jointly cut production 20 per cent this year in a bid to halt falling prices.

The association successfully reduced production 7.55 per cent last year, which helped shore up prices.

President Somsak Paneetatyasai yesterday said shrimp farmers had agreed to reduce the number of fries (baby shrimps) put into a farm, reduce harvesting from three times a year to once or twice and stop expanding their farm areas.

"The plan is designed to cope with expected lower purchasing power in major export markets like the US, the EU and Japan. They'd be the ones most affected by any global economic meltdown," said Somsak.

However, consumption is not expected to drop sharply in line with the economy. Fortunately, the return of Generalised System of Preferences (GSP) tax privileges from the EU will encourage Thai shrimp exports to that market.

US shrimp imports grew slightly in the first nine months of the year, 1.07 per cent to 556,936 tonnes. At the same time, Thai shrimp exports to the US dropped 4.74 per cent to 126,069 tonnes, due mainly to the economic slowdown.

Meanwhile, EU shrimp imports decreased 2.44 per cent to 757,575 tonnes during that period. Thai shrimp accounted for 3.95 per cent of that amount, or 29,961 tonnes, an increase of 42.55 per cent from the same period last year. A weaker British pound and euro and the return of GSP tax privileges have created opportunities for Thai shrimp.

Japan is facing economic recession. Because of this, its total shrimp imports declined 9.12 per cent to 273,312 tonnes in the first nine months of the year. But imports from Thailand reached 56,345 tonnes, up 9 per cent from the same period last year. Thai shrimp enjoyed a 13percent share of the Japanese market.

Somsak pointed out that oil prices, rawmaterial costs and fluctuating exchange rates all affected shrimp manufacturing and exports.

"Thai shrimp exports are still experiencing a positive trend in both local and export markets, because our products meet stringent international foodsafety standards, particularly those of the EU, and our pol¬icy of balancing supply and demand will stabilise prices," he said.

Surat Thani Shrimp Farmers' Club president Ekapoj Yodpinit said Thai shrimp farmers would have a brighter future next year, as the cost of many raw materials were declin¬ing. For instance, feed meal increased 22 per cent early this year but recent¬ly dropped 5 per cent. In addition, if the average oil price stabilises at US$50 (Bt1,700) per barrel throughout next year, farmers will be able to survive.

However, exchange rates, oil prices and trade barriers remain important negative factors affecting Thai exports. Thai shrimp farmers must continue focusing on foodsafety standards, traceability, environmental conservation and labour welfare to meet market needs.

Somsak added that next year, Thailand's shrimpexport value would remain unchanged from this year's Bt80 billion, due to exchange rates. However, the country's exports will achieve its target of growing 5 per cent to 360,000 tonnes this year.

The domestic price is increasing, with bigsize shrimp (50 units per kilogram) trading at Bt123 yester¬day, up from Bt120 before despite negative economic factors. In addition, export is quoted at Bt231 a kilogram.

The reasonable price allowing farmers to survive would be Bt150 a kilogram, against a cost of Bt120 a kilogram.

Thailand's shrimp cluster consists of 1.5 million farmers on a total farm area of 30,000 rai.