Experts warn of shrimp oversupply

As the world’s biggest shrimp exporter, Thailand employs advanced shrimp farming technology such as bio-security farming, a system that increase yield and ensure high quality. However, farmers manager biosecured farms differently depending on their capital.

The attractive price of Thai shrimp will encourage farmers to breed more shrimp in pursuit of high profits. But fast-expanding farm areas could damage the business as farmers might ignore quality and bring about oversupply, leading to problems when the price drops, warned Somsak Paneetatyasai, president of the Thai Shrimp Association.

“We fear that farmers are lining up to increase yield by expanding farm areas or putting too many baby shrimp into ponds,” he said. “This way, output will not be as high as expected and on the other hand it might affect shrimp quality and the survival ratio of shrimp.”

“This will destroy the golden era of Thai shrimp business and in the end farmers will face losses rather than profits,” he added.

Somsak suggested that farmers seriously consider whether they should expand farm areas to go for higher production. They should concentrate on quality to maintain not only customers’ confidence but also high prices.

Shrimp exports generate almost 100-per-cent added-value for Thailand as they rely on 90-per-cent local content. In addition, the business employs about 1 million to 1.5 million people in farms, trawlers, hatcheries and export businesses. About 35,000 to 50,000 farmers have shrimp farms in Thailand. Last year, export value reached more than Bt100 billion at an exchange rate of Bt30 per dollar. The main export was black tiger shrimp.

Rising shrimp prices now derive from two key factors that have caused a global supply shortage: the spread of the IMNV (infectious myonecrosis virus) shrimp virus in Indonesia and Brazil, Thailand’s major export rivals, and the oil spill in the Gulf of Mexico.

This also pushed up world shrimp prices by 30-50 per cent over the past years.

Somsak pointed out that Thailand had the potential to double production but said that would pull down world prices.

In fact, Thailand needs to see steady prices for further business growth.

A few years ago, the association asked for more cooperation from farmers to cap their production instead of expanding quickly as in past years.

The policy aimed to limit Thai shrimp production to 640,000 tonnes per year to balance demand and supply of Thai shrimp and sustainable growth in terms of price.

“The association has taken a roadshow to the main production areas to improve understanding of the strategy,” said Somsak.

The Kingdom is targeting shrimp exports of 400,000 tonnes this year compared with 380,000 tonnes last year. Global shrimp production averages 4.5 million tonnes. Of the total, farmed shrimp accounts for 2.5 million tonnes and the rest is caught in the sea.

Somsak has closely monitored the shrimp industry for 10-15 years and seen some big changes. Most importantly, prices have dropped 30 per cent, which is in line with the exchange rate rising from Bt45 to Bt30 against the dollar.

In addition, development in terms of parent shrimp, advanced machines and modern farm management has allowed farmers to achieve a higher feed conversion ratio.

“It is significant that the Thai shrimp industry has turned from black tiger shrimp to white shrimp or ‘vannamei’, which accounts for more than 90 per cent of supply, while the black tiger and wild shrimp share the rest,” said Somsak.

During the period, use of the vannamei shrimp breed has increased yields from 800-900 kilograms per rai to 1,500-2,000 kilograms now. With new technology, high-yield shrimp breeds and good farm management have meant farms can have three crops per year.

So far, the association has drawn up a short-term development plan and a yearly plan to maintain both export volumes and values. The year-on-year plan will focus on disease prevention and preventing production from increasing more than 100,000 tonnes per year.

The association is also convincing shrimp farmers not to expand farming areas but to concentrate on quality to achieve a high survival ratio. It is hoped this will help expand mangrove forests and ensure sustainable development and food supply in the long run.

Somsak said seafood supply was falling. If the high seafood consumption ratio remains unchanged, the seas will be empty of anything to catch within 40 years.

Moreover, skyrocketing oil prices are also reducing seafood supply. This is prompting trawlers to invest more in fishing technologies to offset their increasing costs.

Shrimp farms will play a key role in feeding human beings in the future.

In addition, the seafood supply will not come directly from the seas but will be replaced by “aquacultural goods”.

“We can say now that ‘aquacultural products’ will be Thailand’s destination in the future,” said Somsak.
Source: Vietfish International
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