Shrimpers plan to cut output by 20% in 2008

Business News - Tuesday December 18, 2007

AGRIBUSINESS / SEAFOOD PROCESSING

Shrimpers plan to cut output by 20% in 2008

Move designed to prop up falling prices

PHUSADEE ARUNMAS

Local shrimpers say they will cut output by 20% next year in an attempt to stop a price decline caused by oversupply.

The average price of shrimp is currently 95 baht a kilogramme, down from about 150-160 baht last year and about 30 baht lower than production costs, said Somsak Paneetatyasai, president of the Thai Shrimp Association.

Thailand's shrimp exports this year are estimated at 360,000 tonnes worth about 80 billion baht.

Falling prices and the baht's volatility had cut farmers' earnings despite an increase in exports, which are up 6% in volume from 2006.

"Shrimp farmers have suffered on two fronts: falling prices of shrimp but high production costs due to high fuel prices," Mr Somsak said.

Total shrimp output this year is expected to be about 530,000 tonnes, up from 500,000 tonnes last year. The industry plans to curb local supply next year at 500,000 tonnes and lift exports to 370,000 tonnes to prop up prices.

Thai shrimp exports are likely to compete hard with shrimp from China and Indonesia, which are expected to produce about 480,000 tonnes and 285,000 tonnes of shrimp next year, respectively. Vietnam and India are also reported to have high production, at 145,000 and 110,000 tonnes respectively, after shifting to raise the high-yielding white shrimp species.

Dr Surapol Pratuangtum, president of the Thai Marine Shrimp Farmers Association, said it was necessary for raisers to cut production in order to stabilise market prices. Farmers are advised to raise fewer crops and reduce the number of ponds to raise shrimp.

"We expect to see no expansion of shrimp farms next year as only 30,000 tonnes of additional output have put the industry in jeopardy," he said. "Worse, Thailand, as the largest exporter, has been blamed by foreign producers as a cause for market prices to fall."

Ekapoj Yodpinit, president of the Surat Thani Shrimp Farmers' Club, said shrimpers and farmers in his province and nearby have co-operated to limit supply.

Many farmers have turned to growing oil palm to benefit from heavy demand from the biofuel industry, he added.

Bangkok Post