Low vannamei prices mean Thai output could dive, but black tiger might increase : June 4, 2018
Tom Seaman and Matilde Mereghetti: UndercurrentNews
BANGKOK, Thailand — The collapse of vannamei shrimp prices in recent months is expected to see production in Thailand decrease rather than increase, as was previously being forecast, sources told Undercurrent News.
A planned 10% increase in total output from 2017 production of about 300,000 metric tons has been scratched by local producers.
“Farmers cannot survive with those prices,” an executive at one of the largest processors in the country told Undercurrent, asking not to be mentioned by name, during the Thaifex – World of Food Asia show in Bangkok last week.
Meanwhile, demand for black tiger shrimp is good and production, which is a small percentage of Thailand’s total, might increase somewhat, sources said.
For vannamei, some sources expect production for this year to remain stable year-on-year, while others said Thailand’s output could drop 10-20% in 2018.
During an interview with Undercurrent in the company’s Bangkok headquarters, Sunjint Thammasart, chief operating officer for Charoen Pokphand Foods’ aquaculture business, said the volume could be “plus or minus 10%” the level seen in 2017.
However, Satasap Viriyanantawanit, general manager of Siam Canadian Group, said it could be as much as “20% lower” than the original prediction, he told Undercurrent.
“We will see lower production because farmers harvest early to cut down the losses. Around 250,000t is my best guess. Nobody knows for sure, but we expect something around that.”
The first source said he didn’t expect total production to fall compared with last year’s levels, but noted that probably farmers will seed less baby shrimp in the upcoming production cycle and will be tempted to reduce quantities farmed, due to current low prices.
During the show, Undercurrent revealed there is a scheme in place to set minimum prices for farmers. This might help farmers to maintain production volumes, rather than drop their output sharply.
Undercurrent first reported the scheme, which will see processors agree to buy 10,000 metric tons in total volume at price levels around 20% over the current state of affairs over the next 60 days, on Thursday. Then, Adisorn Promdee, director general of the department of fisheries, confirmed the government has partnered with the Thai Frozen Foods Association (TFFA) to set a bottom level for shrimp farmed in the country.
Processors and farmers met on Wednesday, as the TFFA celebrated its 50th anniversary, and will meet again on June 4 and June 6, sources said.
TFFA president Poj Aramwattananont — who packers have praised for his role in the deal and also his leadership of the sector — has not yet responded to request for comment from Undercurrent.
Black tiger production
Meanwhile, black tiger output accounted for about 3% of Thailand’s total 300,000t of shrimp last year, sources said during the show.
Black tiger shrimp’s price premium over vannamei has slightly increased in 2018 so far compared with last year, but is expected to further rise later this year, sources told Undercurrent. As a result, some Thai farmers might be encouraged to slightly increase their production of this species.
However, vannamei will remain dominant, because it’s easier to farm, according to sources.
Thai processors face competition from Chinese buyers, who purchase black tiger — mainly from areas near airports — to export them live into China. They offer up to 100% more than local processors, a source said.