Published: 04 September 2012
Shortage of shrimp fry, onset of disease pushing Thai raw material prices up.
A shortage of shrimp fry and the onset of disease are the main factors driving Thai raw material shrimp prices up by around 20 percent over the past two months, according to industry insiders.
July farm prices for Thai farmed shrimp were between THB 113 (€2.9/$3.6) and THB 136 (€3.5/$4.3) for 60 pieces per kilogram and THB 106 (€2.7/$3.4) to THB 131 (€3.4/$4.2) for 70 pieces per kilogram.
September prices are at THB 147 for 60 pieces, and THB 140 for 70 pieces.
One of the major factors pushing up prices is the spread of early mortality syndrome (EMS) contributing to a global shrimp shortage, said Bualuang Securities analyst Prasit Sujiravorakul.
With the onset of EMS in China, Vietnam and Malaysia, shrimp supply has gone down, thus driving prices in Thailand up, he said.
EMS, which has severely affected Vietnam’s shrimp production, also started to rear its head in small parts of Thailand two or three months ago, Sujiravorakul told IntraFish.
But Thailand is unlikely to be as affected as Vietnam by EMS because about 40 percent of its farmers use closed systems, which means it is easier to control any outbreak, he said.
In addition to a global supply shortage, big Thai exporters with large inventory spaces are buying up shrimp, and this is also keeping prices up, said Jim Gulkin, CEO of Siam Canadian.
“I think shrimp prices now are at a normal level they should be,” said Phochara Luengrungroj, commercial manager for shrimp giant Charoen Phokphand Foods (CP Foods).
If prices continued to remain at May to June levels, farmers would have stopped shrimp production, Luengrungroj told IntraFish.
There are rumors a major shrimp producer, which controls about 30 percent of farms in Thailand, is withholding shrimp fry supply to manipulate prices.
But Sujiravorakul disagrees and feels the other 60 to 70 percent of farmers can influence the Thai market as well, so there are no grounds for such speculation yet.
He expects prices will continue to rise in the next three to four months, but is unsure of the extent of the increase, saying it really depends on how Thailand and other countries cope with the disease.
Such a sudden spike at this time of the year was previously seen before, but that was when global demand was strong, said Gulkin.
This time, the global demand market is definitely not a factor in pushing prices up, with the EU remaining quiet for the past year, he said.
In addition, the United States and Canada have alternative shrimp suppliers this year with India, so it’s mainly the supply factors that are driving the spike in prices, Gulkin told IntraFish.
Prices may ease off once production season starts in October and November, he said.