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Thai shrimp sector fully recovered by Q2 next year?
September 03, 2013, 10:07 AM

Thiptawat Suwantammarong, analyst at Asia Plus Securities, said "this is one of the worst crisis for Thai shrimp industry."

Production dropped by more than 50 percent compared to its normal production size of 500,000 metric tons a year. The consequences were severe: Shrimp prices went through the roof, and the shortage has left everyone scrambling for product.

Thailand's biggest shrimp import partner, the United States, bought 30 percent less shrimp in the first half of this year. The market will see some rebound in the next months, Suwantammarong said, but a full recovery cannot be expected before the second quarter of next year.

Prasit Sujiravorakul, an analyst at BNP Paribas Securities, agreed with Suwantammarong, saying production levels could normalize by late spring. "The second quarter output this year plunged to 50 percent of normal levels and this will slightly go up throughout the rest of the year," he said.

Output will have recovered to a 20 percent gap compared to normal production levels by the end of this year, he predicted. As a result, prices will go down, and have already started going down. "The price came down 10 percent in the market last week," he told IntraFish.

Some analysts have predicted a shrimp price crash once Thailand is back to its old strength, and Sujiravorakul agrees -- to a certain extent. "The price will drop dramatically next year," he said. "Margins of businesses could be in jeopardy."

But as everyone has been hit by the crisis -- reflected in the financial statements of many of the big players --Thai producers will actually be better off next year, he said.

High debt-level The analysts are cautious. While Suwantammarong said the government and industry bodies have done a great deal to stop the disease from spreading, farmers are esitating to seed farms.

They want to see the implemented measurements actually work. "It is difficult to boost shrimp output to the level before the disease started spreading," he told IntraFish.

The issue now is there are no funds available to raise the farms again, as the debt level of farmers has risen throughout the outbreaks, said Sujiravorakul.

"They would need some sort of support," he said.

Strengthening cooperation with neighbors Panisuan Jamnarnwej, president of the Thai Frozen Foods Association (TFFA), is somewhat more optimistic.

In a statement, he said with the help of "corrective measures from the Thai Department of Fisheries, our association is confident this crisis will come to an end soon."

The association is currently looking to strengthen its trade relationship with Japan -- the second largest importer of its shrimp -- and to expand its cooperation with neighboring countries such as Myanmar, Laos and Cambodia.

"They can help enlarging and intensifying the scale of aquaculture as well as shrimp farming," Jamnarnwej said.

His aim is for Thailand to become "the center of quality seafood raw material import and bring them to the higher production process for value-added, ready-to-cook and ready-to-eat products."

This cooperation could also help Thailand to "meet many importing countries requirements," he said.

Source: (IntraFish)
Nguyen Bich
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