Move for shrimp-pledging opposed
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Group plans purchases at higher prices from farmers
The Thai Frozen Foods Association has come out against the government’s plan to launch a pledging programme for shrimp, arguing that the measure would not shore up prices but would instead ruin the quality of Thai exports and create losses for the Kingdom.
The association’s reaction came after the official Farm Policy and Assistance Measures Committee announced plans to allocate at least Bt1 billion for purchasing 10,000 tonnes of vannamei (whiteleg) shrimp to help farmers hit by low prices.
To solve the problem of falling prices, the association said it would negotiate with farmers for the purchase of shrimp at better market prices.
Panisuan Jamnarnvej, president of the association, yesterday said the pledging scheme would lead to huge losses for the country.
He argued that the government would only be assisting a small group of farmers and others well placed to take advantage of the subsidy, while shrimp prices would not rise as predicted.
“Although the government has announced pledging for shrimp, prices will not increase because of low demand in the world market. The government will lose a large sum of money from such inefficient subsidisation,” he said.
The current market price is quoted at Bt110 per kilogram, while farmers have called for a government subsidy to ensure that Bt145 a kilo is achieved.
However, the association insists Bt145 is too high a subsidised price, because shrimp prices in the world market have dropped continuously as a result of increased supply in many producing countries.
Panisuan said the association, acting on behalf of 21 groups of companies in the shrimp industry, was urging talks with shrimp farmers’ clubs and cooperatives with a view to solving the problem of slumping prices by other means.
He said the government should not intervene via a high price subsidy, as it would only result in huge losses.
To create fair practice for farmers, the association said the government could allow the Fishery Department to set an appropriate purchase price.
In the event that the authorities insist on pursuing the pledging plan, the association called on the government to develop the quality of stocks, as previous shrimp pledging had resulted in damaged produce.
In 2009, the government allocated Bt1.4 billion for shrimp pledging. However, it was faced with huge losses as it could not release produce to the market because most of the stock rotted while in storage.
Poj Aramwattananon, honorary president of the Thai Frozen Foods Association, said the government lacked a sustainable plan to stabilise shrimp prices in the market.
The pledging policy would only benefit a small group of farmers and traders, while creating losses for the public purse, he said.
Poj added that falling prices resulted from lower demand and economic sluggishness in major shrimp-importing markets, namely the United States, the European Union and Japan.
Moreover, there is additional supply in the world market, in particular from India, while the too-high price of Thai shrimp since last year has also encouraged importers to buy from the Kingdom’s export rivals.
According to the association, the price of shrimp in the world market has dropped from US$9.40 per kilo last year to $6.30 now.
In the first quarter, Thai shrimp exports dropped to 37,000 tonnes, from 46,000 tonnes during the same period a year ago.
Shrimp exports slumped 24 per cent in the first two months of the year, while sales by competitors rose significantly because of their lower prices.
Indonesian shipments grew by 24.6 per cent, Vietnamese sales by 13.8 per cent, Indian exports by 33.1 per cent, Ecuadoran sales by 38 per cent, and Mexico’s by 90 per cent.
