March 10, 2008

Thailand urged to help troubled domestic shrimp industry
 

Thailand's shrimp industry is now facing low prices on top of high feed costs, which could risk the industry's sustainability, according to Prantalay, subsidiary of Union Frozen Products on Thursday (March 6, 2008).

The Thai government must remedy the critical problem of oversupplying and declining prices, said Anurat Khokasai, chief marketing and operating officer of Prantalay, which has the support of the agriculture ministry.

Price for medium-sized shrimps have already dropped from THB145 per kilogram to THB120-125, and could drop below THB100 soon due to oversupply and lower demand from overseas markets, especially the US and the EU.

Shrimp prices usually decline in mid-year, as US importers will slow down imports in order to force down prices. As a result of an annual price decline, shrimp farmers have cut back on production, leading to fears of inadequate supply.

The industry proposed that contract farming could be established between all shrimp farmers and producers to guarantee minimum price, while allocating a budget to purchase freezers to ensure sufficient supply during the harvest season.

Contract farming could mitigate losses from declining prices, and the government should act as a middleman to help set up the project so that farmers will feel more confident about joining, said Anurat.

Minimum price for medium-sized shrimps must be set to THB120-125 per kilogram to make contract-farming work. Production costs are currently at THB110-115.

If the proposed plan is successful, it will not only ensure that the farmers will not lose their investment despite a declining shrimp demand, it will also ensure a sustainable development for the shrimp industry, said Anurat.