Increase In Shrimp Production

Demand for shrimp products will likely increase, and production in 2010 is expected to be close to this year's (2009) volume.

The economic- and business-analysis firm said exports of shrimp products might continue to grow into next year (2010) but at a more moderate rate, because of intense competition in the global market and a gradual economic recovery in major shrimp-importing countries.

In 2009, shipments of shrimp products are expected to reach a value of US$1.37 billion (Bt45.68 billion), a year-on-year rise of 5 per cent.

In 2010, the export value of shrimp products may reach $1.5 billion, increasing 9.5 per cent year on year, thanks to the global turnaround, the firm said.

Given an expected rise in demand for shrimp products, shrimp prices in 2010 may climb 10 per cent to an average of nearly Bt190 a kilogram. The Thai government will likely not have to intervene in the market via price-guarantee or brokerage programmes like it did in 2007 and 2008, it said.

However, close attention should be paid to supply volatility, due to diseases and adverse weather conditions that may affect Thailand's competitiveness and thus shrimp prices.

KResearch said other points needing a closer watch included the control of production costs - especially for animal feed - to maintain competitiveness; negotiations on anti-dumping tariffs imposed on Thai shrimp products by the US; and efforts to remove Thailand from a list of countries using forced child labour in processing farmed shrimp - which had been used as the foundation for trade protectionism by some shrimp-importing countries.

As well, there should be a focus on social accountability, especially on issues related to the treatment of workers and working conditions at shrimp farms, as well as on environmentally friendly shrimp production to help reduce global warming.

Other issues of concern include shrimp quality, sanitation and hygiene standards, as well as the impacts of the Asean Free Trade Agreement. Some exporting countries may take advantage of relaxed rules of origin to export low-quality shrimp products via Thailand, which may tarnish the Kingdom's reputation in the long-term, KResearch warned.