Shrimp exporters want govt to reconsider minimum wage hike
Shrimp producers want the government to revise the policy to raise the minimum wage and help with outsourcing, penetrating new markets and eliminating non-tariff barriers.
They also want the government to promote value-added development to ensure rising exports for the industry. A report from the Thai Trade Offices in North America, Europe and Latin America
showed that Thailand is losing market share and export competitiveness to Vietnam due
to that country’s lower shrimp prices. Vietnamese shrimp is cheaper by 20-30 per cent.
Amid the global economic slowdown and euro crisis, consumers are spending their money carefully and choosing cheaper goods from Vietnam, the report said. In the first seven months of this year,
Thai shrimp exports dropped by 10 per cent to US$1.6 billion (Bt49.25 billion). The Commerce Ministry recently cut the growth target for shrimp exports this year to only 5 per cent from the earlier projection of 13 per cent to $3.25 billion. Kanokknang Pongsathaporn, senior marketing
manager of Golden Sea Frozen Foods Co, said last week that the increase in the minimum daily wage to Bt300 and the shrimp price subsidy have pushed up production costs.
“The government’s policies have destroyed Thai export competitiveness. Production costs have gone up 30-50 per cent, while Thai exporters have lost competitiveness to others due to the big price difference between Thai shrimp and Vietnamese shrimp,” she said. The government should concentrate on promoting Thai shrimp to other markets than the traditional markets like the US and EU.
The government should also negotiate the elimination of non-tariffs barriers to facilitate exports of Thai shrimp, she added. The government has been called on to review its plan to increase wages at one go so that companies can have an opportunity to adjust their production.
Large players could maintain their competitiveness because they have successfully
developed innovative, value-added shrimp products. However, SMEs need support
from the government to assist them to do the same.
Golden Sea Frozen Foods is targeting $20 million in exports this year. The company has drawn up a strategy to penetrate Asean markets particularly next year as it sees greater opportunities to earn more income with lower logistics costs. It plans to double its sales by 2015 in the
integrated market under the Asean Economic Community.
