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December 18, 2008
 
Thai Shrimp Weekly: Shrimp prices soar as farmers announce production cutbacks (week ended Dec 17, 2008)           
 
An eFeedLink Exclusive       
 
 
Price summary
 
Thai shrimp prices rose by up to THB12/kg in open trading at Mahachai this week, their biggest jump during the last three weeks of price rally, after shrimp farmers announced they are cutting production by 20 percent.
 
The buying rates of the Thai Frozen Foods Association, made up of seafood processors and exporters, went up by up to THB8/kg, also the first significant rise in many weeks.
 
 
Market analysis
 
After months of sustained price depression, shrimp prices began to pick up three weeks ago at the start of the December holiday season. Somsak Paneetatyasai, president of the Thai Shrimp Association, said that while shipment to the US, the country's main shrimp buyer, had contracted by 3.38 percent during the first nine months of the year arising from its current financial troubles, sales to the EU, Japan and China had improved.
 
Thousands of shrimp farmers across the country have agreed to cut output by 20 percent in an attempt "to stabilise prices and adjust to reduced global consumption," Somsak said.
 
With the cutback, production next year is forecast at 392,000 tonnes, down from the 530,000 tonnes produced in 2007 and 500,000 tonnes in 2006.
 
Last year, the country's shrimp farmers adopted the same strategy to rein in falling prices. This resulted in a 7.5 percent drop in output for 2008 estimated at 490,000 tonnes.
 
Despite the current global crisis, Somsak expects Thai shrimp export to grow by about 5 percent in 2009 due to increased demand from Japan, China and the EU.
 
"Thailand's shrimp prospects remain promising next year given lower production costs, higher consumption, and successful access to fast-food chains, making shrimp available at every corner like pork and chicken," Somsak said.
 
The association forecasts shrimp exports will increase by about 5 percent next year. This year, exports are estimated at 360,000 tonnes, up slightly from 354,664 tonnes in 2007. For the first nine months of 2008, Thailand's export volumes to China, Japan and the EU rose by 75 percent, 7.1 percent, and 24.7 percent respectively.
 
Despite its current financial troubles, the United States' shrimp imports in the first half of 2008 totaled 236,000 tonnes remaining almost unchanged in terms of volume compared to the same period in 2007, while import value grew 2.4 percent.
 
Thailand maintained its leading position in the US shrimp market with 188,300 tonnes equivalent to US$1.2 billion but saw its exports to this country decrease by 3 percent both in volume and value. Nevertheless, its market share continued to grow slightly in the US market.
 

White shrimp prices (in Thai baht) at Thailand's main markets

Unit of Measure: Thai Bhat

Shrimp size

Mahachai seafood market

Thai frozen foods association
benchmark price

Bangkok markets

 

Dec 10

Dec 17

Dec 10

Dec 17

Dec 10

Dec 17

40 pcs/kg

- 

- 

127.40

125.00

- 

- 

50 pcs/kg

113

125

108.80

115.00

150-165

150-165

60 pcs/kg

107

116

99.10

105.00

140-150

140-150

70 pcs/kg

100

110

91.20

100.00

120-130

120-130

80 pcs/kg

94

100

85.40

95.00

110-120

110-120

90 pcs/kg

90

90

82.00

90.00

100-110

100-110

100 pcs/kg

81

85

- 

- 

90-100

90-100

Note: Farm-gate prices are THB10-15 lower than those at Mahachai market.
US$1=THB 34.445 (Dec 18)


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