May 10, 2012

 

 

Seafood exporters have suggested a new alternative to moderate shrimp prices and avoid overreliance on the Thai government's pledging plans, by getting farmers to collaborate and swap trade information with exporters for the proper management of their output.

 

Panisuan Jamnarnwej, president of the Thai Frozen Foods Association (TFFA), considers this a more effective method of pushing up product prices in the long term and reducing the burden of government contributions to mortgage schemes.

 

Panisuan agrees, as he thinks the government's pledging scheme would lead to massive losses for the country. He argued that the government would only be helping a few farmers and others set to take advantage of the subsidy -- but shrimp prices would not climb high enough, according to reports.

 

In recent weeks, shrimp prices have fallen to THB113 (US$3.64) - THB 117 (US$3.77) per kilogramme for 60 heads per kilogrammes and THB108 (US$3.48) - THB110 (US$3.55) for 70 heads compared to THB144 (US$4.64) - THB145 (US$4.68) and THB138 (US$4.45) - THB140 (US$4.51), respectively, this time last year, according to reports.

 

This price drop incited shrimp farmers in the South to protest and demand that the government execute a pledging scheme to purchase at least 30,000 tonnes of shrimp from them before the end of August 2012.

 

In addition, farmers as asking for pledging prices of THB145 (US$4.68) per kilogrammes for the 60-head size and THB140 (US$4.51) for 70 heads.

 

However, the TFFA thinks this programme would have little effect on prices and instead weigh down on the state budget like in 2009, when the government invested THB1.6 billion (US$51.6 million) to try to put an end to the falling shrimp market, Panisuan said.

 

Back then, most of that money was spent pledging 15,000 tonnes of white shrimp and paid to seafood operators as storage costs.

 

Instead of pledging, Panisuan said, the TFFA could buy products from farm co-ops at above-market prices.

 

"The government could subsidise the plan, which would require a smaller budget," he added.

 

A plan by the government to adopt a mortgage plan for shrimp should entail a careful selection of participating farmers and cold storage operators.

 

Under the mortgage plan, the latter would be paid to keep the pledged shrimp. But in 2009, the pledging scheme proved that some operators did poorly and caused much damage to the product freshness.

 

Shrimp exports in the first two months of 2012 reached 39,423 tonnes worth US$372 million, a on-year skid of 16% and 9 %, respectively.