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Shrimp Export Forecast Cut

Crustaceans Economics +2 more

THAILAND - Shrimpers have revised down this year's export growth forecast to five per cent from an earlier Commerce Ministry estimate of eight per cent amid a growing financial crisis that is affecting many buying countries, reports BangkokPost.

Thailand, the world's largest shrimp exporter, is expected to draw export revenue of 100 billion baht from the product this year, up by 4.17 per cent from last year.

In contrast, export volume will likely decline by seven per cent year-on-year to 379,400 tonnes due to a shortfall stemming from floods and hotter-than-usual weather, said Panisuan Jamnarnwej, president of the Thai Frozen Foods Association (TFFA).

In the first half of this year, shrimp exports totalled 164,984 tonnes for revenue of 44.6 billion baht, a 12 per cent year-on-year drop in volume but five per cent increase in terms of value.

The decline in volume stemmed mainly from lower consumption in Japan in the wake of the March 11 earthquake and tsunami along with sluggish EU markets.

Mr Panisuan said exporters will continue to run up against negative factors in the second half, especially weak economies in the US and Europe, which represent 45 per cent and 18 per cent of Thai shrimp exports, respectively.

The reduced consumption will affect prices, and shrimpers must adjust their selling patterns to meet demand from Western consumers who prefer smaller shrimp and more economical packs, he said.

For example, US retailers want 12-ounce packs instead of 16 ounces to speed up sales.

"The higher 300-baht daily minimum wage promised by the new government and the stronger baht are other major operating risks," said Mr Panisuan.

Poj Aramwattananont, the TFFA's honorary president, said the stronger baht will cost exporters six to seven billion baht in revenue this year.

The baht edged up to 29.80 to the US dollar yesterday from a first-half average of 30.70.

The US downturn has seen the baht strengthen significantly and forced shrimpers to avoid long forward sales in order to mitigate risks.

Mr Panisuan said the floods that ravaged the South early this year has resulted in lower output but spurred export prices.

Based on figures from Infofish, established in 1981 as a project of the UN Food and Agriculture Organisation, supply from Thailand reached its peak last month, two months later than normal due to the floods washing away 50,000 to 60,000 tonnes of farmed shrimp.

This will result in a 10-15 per cent decline in Thai shrimp production this year, pushing up prices by as much as 40 per cent.

Supply shortages in other producing countries such as Vietnam and Indonesia have also contributed to rising global prices.

With the present gloomy world economy, the TFFA suggests shrimpers eye more East Asian markets such as South Korea, China and Hong Kong, which show good growth potential.

China will likely be the second-biggest retail food market by 2020, just behind the US.

Mr Panisuan expects a brighter outlook next year thanks to a number of major world events that will help to boost consumption.