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Thai Vannamei farmers panic as prices plummet

Thai shrimp farmers have been switching from Monodon to Vannamei in their droves, as a means of avoiding the disease problems that have hit Monodon and driven to a large extent by the lure of cheaper feed. Output is expected to equal Monodon production this year but now the price is falling through the bottom of the market, and farmers are asking the government to intervene.

November 18, 2003

Thai shrimp farmers have been switching from Monodon to Vannamei in their droves, as a means of avoiding the disease problems that have hit Monodon and driven to a large extent by the lure of cheaper feed. Output is expected to equal Monodon production this year but now the price is falling through the bottom of the market, and farmers are asking the government to intervene.

 

L.P. Vannamei farms have sprung up in Thailand like mushrooms in the last couple of years: in the central and upper southern provinces of the country alone, there are estimated to be about 800 hatcheries.

 

Pinyo Kiatpinyo, president of the Thai White Shrimp Producers' Club told the Bangkok Post that feed for black tiger prawns now costs about 32,000 baht per tonne, while feed for white shrimp costs only 21,000 baht. "Farmers can save over two billion baht in feed costs if they raise 150,000 tonnes of white shrimp compared with the same amount of black tiger prawns", he said. But oversupply and other factors have recently slashed prices by almost a third to 50 Baht/Kg

 

Calling for the government to intervene and stop the price slide and provide more distribution outlets or find shrimp dumped in front of Government House, Pinyo told the newspaper that China, which exports some 200,000 tonnes of its 500,000 tonnes Vannamei production a year, has spoiled the U.S. market with cheap products, since it switched exports from Japan after the country detected chemical residues in Chinese shrimp. Domestically, the industry was also suffering, as there have been early harvests in parts of the country to avoid flood damage to stock.

 

Pinyo also pointed a finger at Charoen Pokphand, accusing the industry giant of price slashing. Responding to the accusation, Sujint Thammasart, executive vice-president of aquaculture research and development of Charoen Pokphand Foods Plc (CPF), told the Bangkok Post that the falling price was rather the result of market mechanisms. He said in the article that CPF used to sell baby shrimp for as high as 0.30-0.35 baht each last year to reflect the high cost of imported breeders worth US$35 each. However, since the Fisheries Department temporarily banned imported breeders early this year to prevent the spread of diseases, many local companies including CPF have carried out research to produce their own post-larval shrimp production, leading to an oversupply of baby shrimp. However, prices of larger shrimp (70 shrimp/kg) remained high

at about 110 baht /Kg.

 

"The price fall is just short-term and it would regain after the market adjusts itself,'' he told the newspaper, "and I hope that the situation will leave only professionals in the industry, not those who operate hit-and-run farming.''

 

The paper quotes CPF's senior vice-president, Vitit Pootanasup, as saying that CPF had been running six hatcheries along the Andaman sea and the Gulf of Thailand since last year, with a total capacity of about 400 million baby shrimp a month. He said the volume was still small if compared with the monthly demand of three billion baby shrimp, which was sufficient to raise 150,000 tonnes of white shrimp next year as targeted by the industry.

 

Exports of both black tiger prawns and white shrimp this year are estimated at 220,000 tonnes, worth 80 billion baht.

 

1 Thai Baht = U.S.$ 0.02509; 1 U.S.$  = 39.85100 Thai Baht (today's interbank rate)
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