June 12, 2013

Thailand's shrimp supply declines due to EMS, high labour cost

Thailand's shrimp-processing plants in the East and South have temporarily reduced or suspended production as shrimp disease has cut supplies and higher cost of labour and the baht's appreciation have also dampened the industry's growth for 2013.

Poj Aramwattanont, president of the Thai Frozen Foods Association, said the shrimp industry was facing serious problems due to the lack of supply.

"The processing plants are struggling to maintain their business by reducing the working day, temporarily closing down, or reducing production capacity in order to survive during this critical period," Poj said.

Because of the outbreak of early mortality syndrome, production has dropped by more than 50% from the normal level of 200,000 tonnes to about 90,000 tonnes in the first half of this year, he said. Shrimp production in the first quarter was 63,000 tonnes, in April 13,000, and in May 8,700. Production this month is expected to drop to 8,000 tonnes.

The disease began hitting Thai shrimp late last year. The Fisheries Department is working on the problem, and it is hoped that it will be resolved by the fourth quarter. Because of the baht's appreciation and higher labour costs, shrimp exporters have to struggle this year.

The cost of raw shrimp has climbed from THB160 (US$5.16) to THB240 (US$7.73) for 50 shrimps a kilogramme, while the cost of 100 shrimps/kilogramme has increased from THB100 (US$3.22) last year to THB150 to THB160 (US$4.83 to US$5.16).

As a result, the association projects that the volume of Thai shrimp export will drop by 30% to 40% this year. However, export value will not decline as much as producers have tried to increase the value of their products. The value of shrimp export this year is expected to drop by 10% to 20%.

According to Commerce Ministry data, the value of shrimp export in the first four months of 2013 dropped 19.3% on-year to THB19.8 billion (US$643 million).