HANOI: Thai shrimp raw material prices are rising amid very short supply in the country’s low season, with at least one large packer turning to India for product processing, reported Undercurrent News.
This adds to the ongoing trend of Vietnamese packers buying from India, as both Thailand and Vietnam looks to recover their own production after the spread of early mortality syndrome (EMS).
Unlike Vietnam, the Thai government has a very lengthy inspection process for imported shrimp, meaning packers won’t import unless they really have to.
Last year, however, major packers such as Thai Union Frozen Products told analysts in February they were importing shrimp from India to cover needs in Thailand’s low season, where farmers are still slowly recovering from EMS. A Thai Union spokeswoman said the company does not plan on buying from India this year, however.
“We had done this at the beginning of the crisis. We decided that the domestic procurement is more efficient in terms of lead time and certainty on the raw material quality,” she told Undercurrent.
Last year, Thailand’s production dived to 200,000 metric tons, having been as high as 650,000t in the past.
Although the general view is production will pickup from this somewhat in 2015, it is currently the off season for farmers and prices were high, making imports viable.
It only makes sense for Thai packers to buy from India or other overseas countries when there is a big gap in raw material prices, such as now, sources told Undercurrent.
In recent weeks, Indian raw material prices have been propped up by demand from Vietnam, for sale to China via Haiphong and also for re-processing. Indian prices are, however, currently much cheaper than raw material in Thailand.
For 70 count, head-on shrimp raw material, the current price level in Thailand is around THB 202/kg ($6.19), whereas the same size in India is INR 280/kg ($4.49/kg).
As a result, “Thailand has now joined in [buying from India]”, an executive with an Indian packer, source A, told Undercurrent. It seems Thai processors are also making inquiries in Ecuador, where prices are also down.
A shrimp supplier in Ecuador, where prices are actually coming down, also said there has been inquiries from Thai packers.
