September 29, 2005

Charoen Pokphand Foods benefits from shrimp tariff cuts by EU

Thailand's shrimp industry would benefit from the EU's restoration of preferential import tariffs for its shrimp under the Generalised System of Preferences (GSP), according to Thai agribusiness Charoen Pokphand Foods Plc (CPF).

The EU recently restored GSP privileges for Thailand in order to help the country's shrimp industry that was devastated by last year's tsunami. The original plan was to introduce the lower tariffs in January 1 next year.

Under the new EU GSP, tariff rates for Thailand's fresh shrimp would be lowered to 4.2 percent from 12 percent, and to 7 percent from 20 percent for processed ones. No quantity limits or quotas would be applied.

The EU consumed the most imported shrimp at 700,000 tonnes a year.

CPF said the outlook was good for Thai shrimp exports due to the industry's sophisticated shrimp production technology, strict adherence to good aquaculture practices and environmental protection, probiotic farming and a traceability system.

Thai shrimp exports to the EU were expected to rise to between 35,000 and 40,000 tonnes this year, from 5,000 tonnes last year, according to the Thai Frozen Foods Association. This figure would represent about 15-20 percent of total Thai shrimp exports in 2005.

Meanwhile, CPF said it would triple its shrimp exports to the EU this year to 6,000 tonnes. This would bring its total shrimp exports to 45,000 tonnes, up from 12,000 tonnes in 2004.

CPF registered THB52.56 billion in sales for January to June 2005, up 25 percent from THB42.18 billion during the same period last year. Its corresponding net profit rose to THB4.01 billion from THB3.029 billion.

The company expressed confidence that its sales would reach THB110 billion this year, up 20 percent from 2004, although the US had not yet confirmed its decision regarding anti-dumping tariffs on Thai shrimp products. CPF attributed the increased sales to the EU's GSP restoration.