Thai shrimp industry braces for a tough 2009

The global financial crisis also brings a difficult year for Thailand's shrimp industry.

Shrimp exports for 2009 are seen to drop to 340,000-350,000 tonnes or US$2.15 billion - down by 5.0 percent in volume and 10.0 percent in value on-year. Shrimp raisers will also cut outputs in 2009 to 392,000 tonnes - 20 percent less than in 2008. The cut may deal a severe blow to the shrimp industry as a whole-- from raisers to fry hatcheries, shrimp feed plants, cold storage companies, processing plants and exporters. The reduction may also lead to a slump in shrimp prices, especially amid the slowdown in three major markets that make up almost 90 percent of Thailand's total shrimp exports.

They have also shifted their focus to such products as bio shrimp, sergestid shrimp and processed shrimp products for the retail and fast food markets that are still showing promising export opportunities. Even so, increased exports of these products may not fully offset the slump in shrimp product shipments.

Re-focusing on the domestic market may prove to be difficult during the downturn. The Ministry of Agriculture and Cooperatives as well as the Ministry of Commerce are urged to discuss the problem such as price intervention on shrimp products. Financial help is also needed as shrimp and prawns are more expensive and harder to keep than grain for cold storage requirement.

Nonetheless, industry players hope that the foreseen difficult situation may ease. The US made a recent cut in AD tariffs imposed on Thai shrimp products. In the European Union market, Thai shrimp have also benefited from the reinstatement of GSP privileges on Thai shrimp exports that have now resumed being the largest shrimp exporter to Germany.