March 30, 2011

Thai firm warns shrimp prices may hike on southern flooding

Thai Union Frozen Products Plc, the country's major seafood exporter, is cautioning that prices of domestic shrimp may increase due to flooding in the south, reported local news.

Thai Union is closely monitoring flooding in the southern provinces, which are the country's biggest shrimp farming areas, President Thiraphong Chansiri said Monday (Mar 28).

Prices of shrimp will probably rise further as flooding cuts supply from the region.

Somsak Paneetatyasai, president of the Thai Shrimp Association, said the floods could reduce production and increase prices by 5%. But the higher prices would last briefly and return to normal in April and May when seasonal supplies enter the market.

Ekkapoj Yodpinij, chairman of the Surat Thani Shrimp Farmers Association, said floods have ravaged more than 200 ponds of vannamei shrimp and damaged an estimated 2,000 tonnes of shrimp.

"Prices will eventually increase, but this is not a major concern for the industry. We've been worried about insufficient supplies for exports this year and the floods have just worsened the situation," said Ekkapoj.

He estimates production will decline to 550,000 tonnes this year, far lower than the previous projection of 670,000 tonnes.

That would bring down export revenue from shrimp to THB85 billion (US$2.80 billion) this year, compared with THB100 billion (US$3.30 billion) last year.

Thailand's main shrimp markets are the US, which buys about 200,000 tonnes, followed by Japan (60,000 tonnes) and Europe (50,000 tonnes).