Shrimp industry on the rebound

Shrimp industry on the rebound

Higher prices, waning disease spark hope

After fighting early mortality syndrome (EMS) for nearly two years, Thai authorities and operators are confident that Thailand's shrimp industry is on the way to a recovery in the second half of this year.

The industry outlook is positive with greater output expected despite some small farmers needing more time for adjustment after the outbreak.

Rising shrimp prices is another factor driving farmers to resume business after suffering from the outbreak, said Suvit Praphakamol, vice-president of Charoen Pokphand Foods Plc (CPF), one of Thailand’s biggest shrimp business operators.

Local farmers say that the EMS disaster was worse than the effects of the 1997 economic crisis, which severely hurt the economy but actually helped exports.

A worker loads bags of shrimp feed at CPF’s Ban Phru plant in Songkhla province. Walailak Keeratipipatpong

At that time the country's exports, particularly agriculture and seafood products, enjoyed strong baht depreciation, lifting shipments by 28% in baht terms to 1.8 trillion baht or US$58 billion with 4.5% year-on-year growth.

But the EMS outbreak, detected in white shrimp farms in 2012, was a key factor decreasing Thailand's shrimp exports to only 187,000 tonnes for 60 billion baht, a 42% and 34% decrease in volume and value, respectively, compared with about 308,000 tonnes and 84 billion baht in 2012.

It has affected the shrimp business of CPF, which accounts for 12% of the group's total income.

Last year CPF's operational results expanded by 10% to 389 billion baht, although this was lower than the projection of 15%.

EMS first hit shrimp farms in China in 2009 followed by Vietnam before spreading to Thailand in mid-2012, leading shrimp output to drop by more than half to only 250,000 tonnes a year later.

The output in 2013 was severely ravaged by the fatal disease that caused shrimp fry to die after a few weeks of seeding.

To deal with the EMS, the Fisheries Department has cooperated with the private sector and come up with they consider effective measures.

The "Stop EMS" programme focuses on improving hatchery and nursing management. Farmers are advised to extend the nursing period to ensure the strong health of shrimp fry before farming at ponds where sanitary water is required.

The Fisheries Department believes the recovery could boost shrimp production to 400,000 tonnes this year, 37% up from last year’s level. The Thai Shrimp Association estimates exports this year could reach 80,000 tonnes, earning 76 billion baht.

Mr Suvit said that low production has caused shrimp prices to skyrocket and this is another key condition that has encouraged farmers.

Big size shrimp for export purposes, or 40 heads a kilogramme currently sell for 275-285 baht/kg, compared with 175-210 baht/kg for the same period last year.

But Mr Suvit conceded that a full recovery is still in the distance as small farmers need time to adjust.

"However, the outlook is positive and improvement will be clearly seen in the second half of the year," he said.

Mr Suvit predicts the improvement will benefit the shrimp feed business of CPF, which produces about 500,000 tonnes of shrimp feed a year from its four plants nationwide.

When consumption of shrimp feed dropped accordingly with falling production last year, the company took the opportunity to improve production facilities at its Songkhla plant to ensure it has sufficient capacity to supply shrimp farms in 13 provinces in the South.

The Songkhla plant now runs at full capacity producing 21,000 tonnes of shrimp feed every month to ensure it can maintain its 50% market share in the South.

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