Frozen food exporters feel the pinch

The Fish Site
by The Fish Site
11 June 2007, at 1:00am

THAILAND - While the strong baht brings smiles to Thai manufacturers who rely on imported raw materials, Thai frozen-food exporters are among the hardest hit as they use locally sourced materials.

Poj Aramwattananont, president of the Thai Frozen Foods Association, said shrimp exports are in a bad situation. He said the only way to maintain export competitiveness is to lower production costs to bring down shrimp prices.

Thailand is the world's big-gest shrimp-product exporter, with total volume reaching an average of 500,000 tonnes per year.

Many negative factors - mainly the appreciation of the baht - have continued to reduce the sector's export competitiveness.

Frozen-food exporters now want to see the government implement a policy to stabilise the exchange rate to lift the country's future exports. "Thailand's trade advantages lie in sanitary standards, innovation, value-added strategies, skilled labour, good infrastructure and tax privileges. All have been run down and we must resort to our own devices. This must be changed," Poj said.

For instance, prices for big-sized shrimp at the farm door have fallen gradually from Bt135 per kilogram last November to Bt110-Bt115 now.

Poj, who is also president of Wales Group Factories, the country's leading seafood exporter, noted that the firmer baht has caused difficulties, as foreign buyers have pressured Thai exporters to reduce prices.

The group cannot complete deals with US buyers, who are bargaining for lower-price quotes for shipments to serve the upcoming Thanksgiving Day, Christmas and New Year's Day requirements.

"The most important period for Thai exporters is next month, because they will start shipping products for the remainder of the year. We will then have a clear picture of the country's exports for the second half of this year," he said.

Source: The Nation