July 1, 2005

Thai shrimp exporters facing setbacks

Due to the delay in establishing European Union preferential tariff rates, Thai shrimp exports will likely drop 21.9 percent this year to US$1.28 billion. The EU Permanent Representatives Committee has proposed postponing restoration of the 2006-15 round of the Generalised System of Preferences (GSP) to next January 1.

On Monday, the EU split countries eligible for the GSP into two groups: least-developed countries, with GSP privileges to be restored July 1; and developing countries, including Thailand and India, with these privileges set to begin next January 1.

Postponement of the GSP for Thailand will badly affect local shrimp producers, as they had pinned their hopes on the EU market. Thai shrimp exporters will still face considerable competition from old and new producers alike in major markets like the US, the EU and Japan.

The KRC said the Thai government and entrepreneurs should move quickly to adjust production capacity to lower production costs, because shrimp-importing countries now would have several cheaper alternatives to choose from. New export markets should be sought, and some possibilities include Canada, South Korea, Australia and the Middle East.

The US will review the imposition of anti-dumping tariffs on shrimp products in October, but due to changing circumstances, Thai exports might not receive a windfall this year, particularly during end-of-year celebrations, when shrimp orders are normally high.