Thai, Indian shrimp prices increase from near all-time lows : June 5, 2018
Tom Seaman and Neil Ramsden: UndercurrentNews
Thailand’s minimum shrimp price scheme has seemingly already had an impact, while in India farmers are also getting higher levels, according to Undercurrent News sources.
In India, prices were at close to an all-time low for week 21, but increased in week 22 (May 28-Jun 2, 2018), according to Durai Balasubramanian, secretary of the Pattukottai Shrimp Farmers Association in Tamil Nadu.
For 100 count shrimp, prices went from INR 165 per kilogram to INR 180/kg, with increases of between INR 10-15 across all sizes (see below, from the Undercurrent prices portal).
According to Undercurrent’s prices portal, the only time prices have been lower was week 27 of 2015.
In Thailand, where a scheme from the government and processors has been introduced in order to increase prices, the levels across all sizes also increased.
For 60 count (see above, from the Undercurrent prices portal), prices increased to THB 125-133/kg in week 22, from THB 120/kg. For 70 count, prices went to THB 120-130/kg from THB 117-118 and 80 count went to THB 115-125/kg from THB 113-115/kg.
The issue for Thailand has been that, although prices have dived, they are still higher than India and Indonesia, meaning orders from US buyers are way down.
Minimum prices, production outlook
According to Balasubramanian, the chief minister of Indian state Andhra Pradesh has instructed the sector to give a fixed minimum price; “but it’s all up to exporters to pass it to farmers”.
Balasubramanian also said farmers have been stocking lower volumes, due to the low prices.
“The first crop is almost finished in Andhra. Restocking has been really low. Heading into next month, raw material scarcity [will] likely hit exporters. Then the market will turn into a farmers’ market,” he told Undercurrent.
India produced around 600,000 metric tons of shrimp in 2016/2017, according to government data. For 2020, India is targeting 1 million metric tons of production.
At the start of the year, the shrimp panel at the US-based Global Seafood Market Conference (GSMC), held in Miami, Florida, predicted Indian production will be 697,000t for 2017/2018 and 757,000t for 2018/2019. However, it remains to see what the low prices mean the output.
In Thailand, the outlook is for lower volumes in 2018.
During the Thaifex – World of Food Asia trade show, held last week in Bangkok, Thailand, sources told Undercurrent of the dismal situation for the country’s shrimp sector.
A planned 10% increase in total output from 2017 production of about 300,000t 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 show.
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.”
Minimum prices
During the Thaifex show, Undercurrent revealed there is a scheme in place to set minimum prices for farmers.
Undercurrent first reported the scheme, which will see processors agree to buy 10,000t in total volume at price levels around 20% over the current state of affairs over the next 60 days, on May 29. 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 on May 30.
Processors and farmers met last Wednesday, as the TFFA celebrated its 50th anniversary, and were due to meet again on June 4 and June 6, sources said.
Siam Canadian’s Viriyanantawanit said there is no government financial assistance involved, which would not be seen favorably in the US, in terms of countervailing duties (CVD).
“Packers do not expect the government to help in the first place, as it will be too risky for US CVD,” Viriyanantawanit told Undercurrent. “Basically, it is individual farming contract between farmer and packer at Thai [department of fishery, DOF]’s suggested price. The government does not provide any further support.”
The scheme, according to Viriyanantawanit’s understanding, works as follows.
“It should be called ‘farming contract’ instead of minimum price. The Thai DOF has been studying and learnt about real farming cost throughout Thailand. They suggest what levels farmers should be able to survive on those particular sizes,” he said.
“Each farmer can register their farm and sign farming contract with one packer. Then that packer is going to support that farmer to buy at Thai DOF’s suggested price levels for up to 10t from each farm,” he said.