November 18, 2003



Philippines Farmers Call for Halt to Falling White Shrimp Prices


Shrimp farmers have called for the Philippines government to help stop the declining price of white shrimp or face a rally at Government House.

Pinyo Kiatpinyo, the president of the White Shrimp Producers Club, said farmers had been suffering as prices had plunged to only 50 baht for per kg containing 100 shrimp, from 130 baht a year earlier.

China's recent price cuts on its white shrimp exports had also exacerbated the situation, Mr Pinyo said.

China, one of the world's largest white shrimp producers and exporters, produces about 500,000 tons of white shrimp a year, of which 200,000 tonnes are exported.

But recently Japan, one of its main markets, has rejected some shipments from China after detecting chemical residues in them.

"Now the products are being shipped to the US market instead at a very competitive price," Mr Pinyo said.

Besides stiff competition abroad, a large number of white shrimp have entered the domestic market over the past weeks due to early harvests by farmers in Phetchaburi and Prachuap Khiri Khan in order to avoid damage from last month's floods.

Farming of white shrimp, known by its scientific name as penaeus vannamei, has gained in popularity in the past two years, as yields are higher and production costs and los ratios lower.

The shrimp are also far less vulnerable to diseases than black-tiger shrimp.

According to the Fisheries Department, more farmers have shifted to white shrimp, since they can be raised in less saline water and farmers can save feed costs because they need less amount of protein than black tiger prawns which need more costly high-protein feed.

According to a White Shrimp Producers Club study, farmers can save over two billion baht in feed costs if they raise 150,000 tons of white shrimp compared with the same amount of black tiger prawns.

Feed for black tiger prawns now costs about 32,000 baht per ton, while feed for white shrimp costs only 21,000 baht.

"Therefore, more farmers have switched to raising white shrimp from tiger prawns," said Mr Pinyo.

The farms have mushroomed, especially in the central and upper southern provinces, run by thousands of farmers attracted by the multi-billion-baht industry. There are about 800 hatcheries and nurseries in the area that sell baby shrimp to the farmers.

Black tiger prawns and white shrimp now share the same proportion in Thailand's shrimp output totalling 280,000 tons this year from 80:20 last year. Diseases such as the "stunt-grow" have affected the black tiger prawn farming industry.

To prevent future damages from oversupply of white shrimp, Mr Pinyo suggested the government map out a strategy specifically for the shrimp industry to prevent an oversupply.

He also proposed that the Internal Trade Department provide more distribution outlets in Bangkok and big provinces for the industry.

"f the government is too slow to address this problem, we may see a group of farmers stage a rally and dump their shrimp in front of Government House," Mr Pinyo warned.

Mr Pinyo, who also runs nursery farms, said small farms were hard hit by a similar business run by industry giant CP Group.

"The company (CP Group) has slashed prices of the shrimp to 0.10 baht each, from 0.25 baht early this year," Mr Pinyo said.

But Sujint Thammasart, executive vice-president of aquaculture research and development of Charoen Pokphand Foods Plc (CPF), argued the falling price was rather the result of market mechanisms.

"Market prices sometimes drop to lower than 0.10 baht and we have to follow suit," he said.

He said CPF used to sell baby shrimp for as high as 0.30-0.35 baht each last year to reflect the high cost of imported breeders worth US$35 each.

However, since the Fisheries Department temporarily banned imported breeders early this year to prevent the spread of diseases, many local companies including CPF have carried out research to produce their own post-larval shrimp production, leading to an oversupply of baby shrimp.

Mr Sujint said, however, that prices of larger shrimp (70 shrimp/kg) remained high at about 110 baht per kg.

"The price fall is just short-term and it would regain after the market adjusts itself," he said.

"And I hope that the situation will leave only professionals in the industry, not those who operate hit-and-run farming."

CPF has been running six hatcheries along the Andaman sea and the Gulf of Thailand since last year, with a total capacity of about 400 million baby shrimp a month, according to Vitit Pootanasup, CPF's senior vice-president.

He said the volume was still small if compared with the monthly demand of three billion baby shrimp, which was sufficient to raise 150,000 tons of white shrimp next year as targeted by the industry.

Of the projected 300,000 tons of output, the proportion of white shrimp and black tiger prawns could be 60:50 next year.

The exports of both black tiger prawns and white shrimp this year are estimated at 220,000 tons or 80 billion baht.