Thailand shrimp processors set own weekly benchmark prices

The seafood processors of Thailand have set their own weekly shrimp benchmark prices based on farm production costs and export prices, countering the Commerce Ministry's price intervention programme.

 

The weekly prices will be announced every Monday and would be used as median prices for food processors and cold-storage operators to buy from farmers nationwide, said Poj Aramwattananont, president of the Thai Frozen Foods Association.

 

On June 6, the Internal Trade Department announced to use about THB300 million to pledge a total of 10,000 tonnes of white shrimp or vannamei from farmers to prevent a further fall in shrimp prices.

 

The programme agrees to pay THB140 per kilogramme for a size of 50 head per kg and THB130 for 60 head per kg. The programme runs from June to October this year.

 

The association opposed the pledging programme, saying it is an idea from giant companies, the Bangkok Post reports.

 

Poj pointed out that the pledging price agreed between farmers and the Internal Trade Department of the Commerce Ministry does not reflect genuine market prices and was based only at the popular Mahachai seafood market.

 

In the past, the sector has allowed parties not in the business to meddle, but now processors prefer to work closely with farmers and set their own prices in order to stabilise shrimp prices in the long term, Poj explained during a meeting this week in Surat Thani where he met with farmers and cold-storage operators from upper southern provinces.

 

Poj added that the association would also persuade raisers nationwide to share their comments on the weekly prices.

 

The association controls up to 70 percent of the local shrimp trade.

 

The 31 member companies from places including Phuket, Surat Thani, Trang and Chumphon will be ready to use the new benchmark to buy shrimp from farmers.

 

For the first week, prices for the 50 shrimp/kg size will be at THB120 per kg, THB20 lower than those offered in the pledging scheme.

 

Poj explained that the falling domestic prices have stemmed mainly from slow orders from the US after the anti-dumping tariffs were imposed.

 

Thai shrimp production is projected to grow 6 percent this year to 530,000 tonnes and export volume to 350,000 tonnes.

 

US$1 = THB33.38 as of June 19, 2008