June 27, 2009

 

Thailand shrimp farmers warn of road blockades

Shrimp farmers in the south of Thailand have threatened to stage road blockades again if the government fails to take effective measures to shore up shrimp prices by the end of June.

 

About 500 farmers from eight southern provinces blocked the main road near the Tinsulanonda bridge in Songkhla earlier this month, demanding for the government to establish a price-intervention programme as shrimp prices have dropped steadily since March.

 

The protest ended after the government assigned the Farmers Assistance Policy Committee to buy about 10,000 tonnes of vannamei shrimp from the market over the next three months. But farmers were unhappy because there was still no concrete decision on longer-term assistance.

 

Plans should be announced quickly or farmers might take action again to pressure the government further, said Kanchit Hemarak, chairman of an association of shrimp farmers in eight southern provinces.

 

Domestic shrimp prices have been declining since early this year due to slow exports. The industry has revised its shrimp export forecast down this year to 396,000 tonnes, from 495,000 tonnes shipped in 2008.

 

June and July are the peak seasons for shrimp but prices have been falling. Prices of 50 shrimp per kg are down to THB112, compared with THB130-140 early this year. A kg of 70 shrimp is lower than THB100.

 

Ekapoj Yodpinit, president of the Surat Thani Shrimp Farmers' Club, urged the government make a quick decision to prevent further price declines.

 

There are more than 200 containers of shrimp entering the market each day, far higher than the capacity of cold storage facilities, 180 to 200 maximum, which significantly affects the price slump, Ekapoj said.

 

There are disagreements within the industry over plans to intervene in shrimp prices, as any delays would cause farmers to suffer while benefiting exporters since they could obtain cheap products, according to Ekapoj.

  

Exporters in the Thai Frozen Foods Association agree with a proposal to use a pledging programme, the same as the one applied every year to buy shrimp from farmers. One minor change the association suggests is for the government to accept headless shrimp only, and pack and freeze them in four-pound packages ready for export.

 

The government prefers to set aside THB1.4 billion in interest-free loans for one year for cold storage operators and exporters to buy shrimp from farmers at a price set by the government. It believes the measure would produce fewer losses for the government while exporters could make a profit if shrimp prices rise.

 

Kanchit said he favoured the pledging programme as an effective way to absorb a surplus.

 

He said the government should authorise the Public Warehouse Organisation to run the pledging programme. It should also set aside a budget for shrimp raisers' co-operatives to buy from their members at agreed prices.

 

The intervention prices agreed early this month would pay farmers based on the size of the shrimp.

 

For instance, 40 shrimp per kg would be THB155 and 50 shrimp THB135. Current respective market prices are THB125 to THB130, and THB110 to THB114.

 

US$ = THB34.0642 (Jun 27)