Thai shrimp packers fighting with China, Vietnam buyers for raw material : June 15, 2016
Tom Seaman : Undercurrentnews
Shrimp packers in Thailand are fighting for raw material with rivals in Vietnam and China, driving up prices.
Raw material prices in Thailand hit a very low level at the start of May, but have been rising steadily since. This comes as prices are also on the increase in India and demand is strong in China for Ecuadorian shrimp.
“Several packers are buying more aggressively, attempting to fulfill pending orders,” Satasap Viriyanantawani, general manager for the Thai business of Siam Canadian Group, an Asian frozen seafood supplier headquartered in Bangkok, told Undercurrent News.
Supply in Thailand, which is forecast to hit between 270,000 metric tons and 300,000t in 2016, is good, “but it is just not enough”, he said.
Also, due to a lack of shrimp raw material in China and Vietnam, some brokers are currently buying directly from shrimp farmers throughout Thailand, Viriyanantawani told Undercurrent.
“These brokers are even more aggressive than Thai packers,” he said.
They are “willing to pay any prices to beat any Thai packers” and obtain enough shrimp for Vietnam and China, said Viriyanantawani.
“Some buy fresh shrimp and deliver by trucks to Vietnam and China. Some may hire small operations to reprocess into headless block and ship over to those two countries. This is beyond our control and it is jeopardizing the situation in Thailand,” he said.
June supply, according to shrimp feed and shrimp fry sales figures, will be down slightly from May.
“Therefore, the shrimp price is likely remaining steady in June,” he said.
Demand from Thai packers will likely remain strong until between the end of July and mid-August, Viriyanantawani said. By then, the majority of current orders will be completed.
For the week of June 6-11, prices for 60 per kilogram count, head-on, shell-on (HOSO) raw material in Thailand are THB 175- 180/kg; up from THB 170- 175/kg the week before. For 70 count, the prices are THB 170-175/kg, up from THB 165- 170. Prices for 80 count are THB 165- 170/kg, up from THB 160- 165/kg.
Going back to the week of May 2-7, when prices hit the bottom, 60 count was at THB 145- 150/kg; 70 count at THB 135- 145/kg; and 80 count at THB 125- 130/kg.
Aggressive Chinese buying has also been a big factor for the shrimp sector in Ecuador this year.
Although prices for HOSO shrimp from Ecuador have recently dropped, sources said demand in China means they are likely to rise again soon.
Prices for ex-farm HOSO 40/50 count, a benchmark for the shrimp industry, fell $0.65 to $6.10 per kilo, Undercurrent reported on June 8.
That came as Chinese buyers stayed away from the marketplace after huge price increases in recent weeks, said one Ecuadorean exporter, who doesn’t expect the situation to last.
“All of the prices have dropped and this is because the few importers in China agreed to suspend purchases for a couple of weeks and force down prices,” the exporter told Undercurrent, on condition of anonymity, at the time. “In reality, there is not shrimp in the world to satisfy demand, and I estimate prices will return to trending upwards in less than a month.”
US, EU buyers look to China
The reason for the demand from China is its farmed shrimp production is said to be undergoing issues so far in 2016.
Earlier in June, sources told Undercurrent China’s output will decide what buyers in Europe and the US have to pay in the second half of the year