March 23, 2004

Thailand Shrimp Exports To US To Fall By 50%

Shrimp exporters in Thailand are anticipating a 50% fall in exports to the United States after anti-dumping duties take effect later this year.

Pong Visetpaithoon, chief operating officer of Charoen Pokphand Foods Plc (CPF), said that although the industry was expecting duties of only 6% to 10%, they could still set back shipments of Thai shrimp to the US, which totalled about 130,000 tons last year.

In the worst-case scenario, if anti-dumping duties are put in place, Thai shrimp exports could fall to as low as 60,000 tons this year, he said.

The US Department of Commerce (USDC) is scheduled to rule on June 8 on whether shrimp from six countries - Thailand, China, Brazil, Ecuador, Vietnam and India - have been unfairly sold below cost in the US market.

"Even though the duties may not be high, some Thai shrimp exporters including CPF have shifted sales to the Japanese and European markets," Mr Pong said.

He said shrimp prices in the United States had risen substantially since the investigation began while shrimp from countries not under review, such as Mexico and Indonesia, were in high demand and sometimes out of stock.

Prices of black tiger shrimp have risen to an average of US$7-12 a pound in the past two weeks, from $5-8 depending on shrimp size.

Mr Pong said the avian flu, which had hit poultry farms in many countries in Asia, had led to more consumption of seafood, including shrimp.

Japan, which normally imports about 40,000 tons of shrimp from Thailand each year, is expected to buy more this year, he said.

CPF, which sells about 5,000 tons of shrimp a year to the US market, is concentrating more on the Canadian, Japanese and European markets instead, he added.

Also of note, the company just sold its poultry business operation in Alabama, Charoen Pokphand (USA) Inc, for 1.6 billion baht due to a lack of profits.

However, a company source said CPF had no intention of selling its operation in Delaware, Aqua-Agri Foods International Inc, which was set up last year to distribute seafood under CPF's own brand names and help market chicken products for CP-USA.

Shares of CPF closed on Friday on the Stock Exchange of Thailand at 3.88 baht, down four satang, in trade worth 10.76 million baht.