November 2, 2004



Thailand May Gain Bt 200 Billion with US, EU Shrimp Tariff Cuts

If the US cuts its anti-dumping rate, and a reduced import tariff to the European market is restored soon, exporters of Thai shrimps could earn as much as Bt200 billion in revenue.


Thai shrimp has been currently imposed an anti-dumping rate of 6.29 per cent on average to gain entry to the US market.


Exporters also have to pay an average import tariff of 14 per cent for frozen shrimp and 20 per cent for processed shrimp in order to access the EU market.


This has slashed the profits exporters enjoyed under the old system when they prospered under a low, single-digit tariff under the EU's Generalised System of Preference (GSP).


In a meeting with representatives from four southern shrimp farmers' associations last week, Commerce Minister Watana Muangsook said the government had received positive signals from key European Union members such as France, Denmark, Italy, Britain and Sweden that the anticipated changes would indeed take place.


"The signals have convinced us that the EU will return the GSP to Thailand, which will in turn strengthen the competitiveness of the country's exports. The export value should reach Bt200 billion," Watana said.


"Prime Minister Thaksin [Shinawatra] has held talks with many EU leaders and has received positive feedback from them," he added.


The Kingdom must now wait for the US Commerce Department to announce its final anti-dumping rate, which currently stands at 6.29 per cent.


Pokkrong Kirdsook, president of the Krabi Shrimp Farmers Association, said positive moves by the US and the EU could help revive exports and undo the damage wrought by ebbing local prices over the last several years.


"The lower anti-dumping rate and the return of the GSP would...stabilise both export and local prices."


The country's shrimp production could potentially double from this year's 200,000 tons to 300,000 or 400,000 tons next year, he said. The export value is expected to jump to Bt200 billion, compared with Bt100 billion after the amendment made in 1995.


He said that greater demand for exports would mean healthier domestic prices for those traders who had been accepting losses for years. The current price of one kilogram of medium sized shrimp (approximately 50-60 shrimp) is Bt130, lower than the average production cost of Bt160 per kg.


The volume of Thai shrimp exported to the EU plummeted by 84.24 per cent after the removal of the GSP, from 32,866 tons in 1995 to 5,181 tons last year.


Of the total 704,603 tons of shrimp imported by the EU last year, 0.7 per cent came from Thailand.

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