April 8, 2014

Thailand's shrimp industry expects to recover in H2 2014

Thailand's authorities and operators expect the country's shrimp industry to recover in the second half of this year, after fighting early mortality syndrome (EMS) for nearly two years.

Despite some small farmers needing more time for adjustment after the outbreak, the industry outlook is positive with greater output expected.

Rising shrimp prices is another factor driving farmers to resume business after suffering from the outbreak, said Suvit Praphakamol, vice-president of Charoen Pokphand Foods Plc (CPF), one of Thailand's biggest shrimp business operators.

Local farmers say that the EMS disaster was worse than the effects of the 1997 economic crisis, which severely hurt the economy but actually helped exports.

At that time the country's exports, particularly agriculture and seafood products, enjoyed strong baht depreciation, lifting shipments by 28% in baht terms to THB1.8 trillion (US$58 billion) with 4.5% on-year growth.

But the EMS outbreak, detected in white shrimp farms in 2012, was a key factor decreasing Thailand's shrimp exports to only 187,000 tonnes for THB60 billion (US$1.8 billion), a 42% and 34% decrease in volume and value, respectively, compared with about 308,000 tonnes and THB84 billion (US$2.6 billion) in 2012.

It has affected the shrimp business of CPF, which accounts for 12% of the group's total income. Last year CPF's operational results expanded by 10% to THB389 billion (US$12 billion), although this was lower than the projection of 15%.

EMS first hit shrimp farms in China in 2009 followed by Vietnam before spreading to Thailand in mid-2012, leading shrimp output to drop by more than half to only 250,000 tonnes a year later.