
Thaifex 2018 blog: Processors starting to feel the heat from low shrimp price situation : May 29, 2018
Thai exporters: EU not a priority market
The Thai seafood sector is increasingly stepping away from Europe and focusing on other markets as the EU bloc remains unprofitable for exporters, insiders from both the tuna and shrimp sectors told IntraFish.
While Thai giant Sea Value has offices in the Netherlands and a plant for tuna loins processing in France, the company does not have any investment plans in Europe, at least not in the short term.
“Instead, we’re focusing on Asia, which is 25 percent of our market,” Somkiat Threamruktakul, marketing division manager at Sea Value, told IntraFish. “Europe is between 20 percent and 22 percent, but the only way we would look at it for investment is if we were able to negotiate better tariffs.”
Likewise, in the shrimp sector, traders are not looking at Europe.
“It’s not a market for us at all, it’s pretty dead for Thailand,” Jim Gulkin, managing director of seafood trading company Siam Canadian, told IntraFish. “Thailand is very much focused on the United States, Canada, Japan, local markets, but not Europe.”
Exec: Thai shrimp sector needs to figure out a way to stay relevant
The situation in Thailand is a struggle at the moment and is worsened by the divide between shrimp producers and processors, Jim Gulkin, managing director of Siam Canadian, told IntraFish.
Disagreements over prices and the need of collaboration between all involved in the sector are leading to an internal crisis, adding to the already complicated global situation.
As farmers try to increase shrimp prices for processors, the latter struggle to position the product in markets where shrimp from other origins is sold at cheaper prices.
“By increasing the prices they make it very difficult for processors to export,” Gulkin said.
Although it’s in the interest of both sides to work together, at the moment there is “more yelling than talking,” he said.
In the past Thai farmers avoided working with processors, encouraged by high demand from Chinese brokers, who at the same time were not as demanding in terms of certification.
However, as other countries such as India and Indonesia sell at lower prices, the Chinese market is opening up to them, leaving Thai producers struggling to sell their product.
“Processors need to convince farmers that to succeed they need helpers, and that’s processors,” Gulkin said.
According to him, the problems in the Thai shrimp sector are piling up, and a number of issues need to be tackled.
“Thailand needs to figure something out to stay relevant. In terms of volumes it can’t compete, so it’ll have to be in efficiency, infrastructure, value-added…I don’t know,” Gulkin said.
The country produced 300,000 metric tons of shrimp in 2017 and production is expected to remain flat this year.
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