Thailand General Market Update - Freight, Raw Material, Covid: Oct 21, 2021
Even there is a report in the market show that the freight cost has reduced around 0.2% from previous week, in reality, we or any Thai exporters haven’t had the freight reduction from the shipping line. The freight rate is still strong and we can see it will be in this level (or stronger) at least until the end of this year. There is no sign of improvement for the ocean freight situation. The available space is still limited. The heavy congestion is still the big problem at the main port. Our customer and most of exporters have told us that they are facing the detention and demurrage charge because of the congestion. The price of freight is still high. We have been offered for $19,000 – $20,000 to LA, $24,000 – $29,000 to NY. And we have only a day or only few hours to make a decision to accept or reject the space offering (with high price) from shipping line or agent. The exporters and all suppliers need to plan their shipment ahead to avoid the delay and high cost. We hope after November the situation will slightly better when the bottleneck at the port has been resolved. But we think the overall problem will not be resolved until summer next year.
RAW MATERIAL / FARMS & HARVEST
Raw material price continuously increased from previous period and we believe it will go up until the end of this year. Head on shrimp size 100 pcs/kg price increases from previous period around 10%, head on shrimp size 90 pcs/kg price increases around 5%, head on shrimp size 80 pcs/kg price increases around 9% and head on shrimp size 60 pcs/kg price increases around 4% while head on size 70 pcs/kg prices still the same as previous period. Most of the farm have finished their crop so the shrimp supply will decrease. At the moment, Thailand is being hit by several monsoon storms. The seafood industry has facing short supply since the catching boat cannot go out. Most of wild caught seafood suppliers stop offering their product. Moreover, other supplier such as packaging and ingredients are also watching the situation carefully. Every area in Thailand is alerted with flood situation. The northern and central of Thailand is affected by big flooding and the water is moving from north to south. Bangkok is now in the dangerous situation since there is a high tide in Chaophaya river and some part of Bangkok is already affected and there are flood alerts for Bangkok for the coming days. We have been warned by the government to prepare for massive flood. As of today the shrimp farm in Chantaburi and Trat has already been impacted by flooding. So the farmer has watched the situation carefully before making the decision for the new crop. The sign of delay the new crop is quite clear. We have heard that some farms will postponed their new crop as far as February next year. White feces and white spot disease are still the problems for the farmer especially when there is a heavy rain.
The number of Covid infected is getting high again especially the Southern of Thailand. However, the government decided to open the country and will resume all business by December. All the seafood factories are still taking high measurement to prevent themselves. The seafood factories still do not run their 100% capacity – the sand box policy or bubble and sealed policy are still being implemented. It is interesting to see what will happen after the government decline the restriction.