Preliminary Estimates of Tsunami Damage to Thailand’s Shrimp Industry

Thai shrimp production could drop by as much as 30%, at a cost of US$ 525 million as a result of the tsunami, a blow on top of disease problems in black tiger prawn and the US antidumping duties; many producers may not survive.
By Dan Fegan
January 12, 2005

Now that the efforts to clean up the devastation caused by the tsunami are under way, it has been possible to make some assessment of the damage to Thailand’s shrimp culture industry. To date, it appears that over 100 local people and their families who were involved in the aquaculture business perished in the disaster. It is also estimated that property damage to aquaculture facilities caused by the tsunami is in the order of 1,000 million baht (approx. US $25 million).

However, these stark figures are only the tip of the iceberg as the follow-on impact of the tsunami is likely to continue for much of the year. The area affected by the tsunami did not have many farms but included some of the most important areas for production of shrimp postlarvae (PL) in Thailand (estimates suggest up to 50% of national PL production) and most of the hatcheries, large and small, were located on or near the shore. Apart from the direct cost of the damage, many small hatcheries will be unable to start up again as their owners lost everything in the disaster and do not have sufficient funds to re-start operations. Others will have to borrow money to repair or rebuild their hatcheries, a process that is likely to take some time given the extent of repair work that is required. Various industry estimates suggest that it will take at least 6 months to get most of the hatcheries back into operation again. This could result in an opportunity loss of some 12,000 million PL with a value of upwards of 1,200 billion baht (approx. US$ 28 million) and will inevitably lead to PL scarcity, higher PL prices and fewer ponds stocked.
The scale of the potential losses to the value of Thai shrimp exports, however, dwarves even these estimates. Even if the hatcheries are able to resume operations within 6 months, it is expected that overall shrimp production may decrease by around 30% valued at 21,000 million baht (US$ 525 million).

Besides the economic scale of the decrease, the human dimension should be considered. Fewer shrimp produced means fewer shrimp processed and, although the processing plants will do what they can to minimize job losses, it is feared that over 300,000 jobs may be lost. Add to that the fact that many of those jobs are in rural areas and are often held by women who are the sole breadwinner in the family, and the added impact on livelihoods is clear.     

The Thai industry has been hit hard lately with disease problems in black tiger prawn and the US antidumping duties. It is now facing another year of losses as a result of the tsunami damage, a year which many producers may not survive. The recent decision by the ITC commissioners to conduct a “changed circumstances” review of the antidumping situation in the light of the tsunami’s impact provides one small ray of hope in an otherwise gloomy future. Although it will not solve all the problems faced by the industry, it will go some way towards giving it renewed faith in its recovery.