September 18, 2015
TUF offers Thai shrimp farmers higher prices to ensure ample supply
The Thai Union Frozen Products Plc (TUF) has offered to buy shrimps from farmers at higher-than-average prices for at least six months starting on October 1, in an effort to ensure ample supply, the Bangkok Post reported.
Rittirong Boonmechote, president of TUF's global shrimp business, said the six-month shrimp price guarantee scheme would hopefully "boost the market price and ensure shrimp farmers stay in business".
Under the scheme, a size of 100 shrimps to the kilogramme would be bought at 120 baht (US$3.37), and the bigger size of 70 per kg at 150 baht, or $4.21.
The Thai frozen shrimp industry has faced a supply shortage and low global prices due to the outbreak of early mortality syndrome and resulting low demand.
Rittirong feared that if the low prices stay, Thai exporters might delay their orders from farmers, depressing prices further.
Thai shrimp exports have continued to slide yearly, dropping to 210,000 tonnes last year from 250,000 tonnes in 2013 and 540,000 in 2012. Exports peaked in 2010 at 640,000 tonnes.
Rittirong, however, expects that this year's exports would return to the 2013 level, at 250,000 tonnes, or a 19% increase from this year's.
Weaker baht with 'no effect'
Rittirong said that the weaker baht would have "normally…help[ed] us with shipment orders, [but it] now has no effect at all since our competitors are stronger than before".
He noted that some importers from the EU had switched to Vietnam after the 28-nation bloc signed a free trade agreement with the neighbouring country.
Around 1,600 shrimp farmers are expected to participate in the price-guarantee scheme, in which the TUF hopes to be assured of sufficient supply for shipment. Hopefully, according to Rittirong, an ample supply will entice buyers back to Thai exporters. "So far, our buyers have remained confident in our product quality. The problem is more about not having enough supply to serve their demand", Rittirong was quoted as saying.
Shrimp farmers who want to participate have until October 7 to register, the TUF said.
The TUF is ranked among the largest seafood producers in the world, with annual sales of over $3.6 billion and a global workforce of more than 32,000 people.
It is listed in the Stock Exchange of Thailand. --Rick Alberto