March 7, 2006

 

Thai shrimp producers fight to regain EU market
 

 

It has been three months since the European Union (EU) reinstated Thailand's generalised system of preference (GSP) trade status but so far, the wave of Thai shrimp imports expected has not happened yet, the EU seafood industry observed.

 

The EU removed Thailand's GSP trade status in 1997, tripling its duty rate from 4 to 12 percent in the process and effectively halting Thai shrimp imports, mainly black tiger shrimps. This allowed producers from Indonesia, China, Vietnam and Central and South America to fill the market demand left by the Thai market.

 

After obtaining the EU's GSP trade status again on Jan 1, Thai producers briefly lowered its prices in an attempt to attract its previous customers, said Oliver Hottlet, director of the Seafood Importers and Processors Alliance and owner of Belgium-based seafood supplier Hottlet Frozen Foods.

 

Since then however, prices have risen again and is in fact higher than most Asian shrimp prices, he added.

 

Holland-based shrimp giant Heiplog's purchasing manager Onno Nienhuis shared that while the company has been buying shrimps from their former Thai suppliers, many firms they know have not made the switch back from Indonesian shrimp.

 

In the meantime, the Thai Union and CP Foods are seeking to close direct deals with EU retailers to bypass importers, shared Hottlet. Nienhuis also observed that the Thai firms are now "very eager to get back their business".

 

The big names in Thailand are not the only ones ready to get their act together.
 
On Feb 27, 13 farmers, feed producers and exporters got together to start the Integrated Shrimp Business Operation project, started to meet international standards now strictly enforced in several countries, and to cope with bilateral trade agreements which would bring stiffer competition to local operators, said Anurat Khokasai, chief marketing officer and operations officer at Union Frozen Products, one of the main participants of this project.
 

The venture will cover the supply of shrimp feed, shrimp stock, farms, machinery and exports, and full traceability along the supply chain.

 

In the meantime, Thai news media reported Mar 6 that the Thai Ministry of Commerce is inviting trading partners from Europe and the Middle East to inspect chicken and shrimp production in Thailand, to make sure that products are free of bird flu and toxic chemical residue problems, in hope of boosting exports.

 

In fact, Thai exports to the EU is likely increase in the May-July period, said Jim Gulkin, managing director at Thailand-based shrimp and seafood exporter Siam Canadian, adding that this is when Thailand increases its shrimp production.

 

Thailand's shrimp exports this year are projected to increase by 7.7 percent to 450,000 tonnes from 418,000 tonnes in 2005, with export values will rise 20 percent to US$2.4 billion from US$2 billion, according to the country's Department of Fisheries.