Thai firms value-add to limit shrimp losses

Thai firms say they’ve been able to make up for tighter shrimp supplies by making the shrimp stretch longer, with new ranges of breaded products.

“The value add at the moment is still low compared to where we can be, so there’s a lot of space to increase [value add],” explained Nirachda Wongchinda, senior markets expert at Thailand’s Department of Fisheries. “We have to learn to use less shrimps,” she told SeafoodSource.

Shrimp-based dimsum specialties like shaomai has been a hit for export-focused firm, Siamchai International Food Co based in the city of Ranong, which has also rolled out a line of shrimp nugget sticks and shrimp-noodle rolls.

“We’re able to get an extra 15 percent on the margin of certain value-added shrimp products,” said a company salesman. Shrimp tempura shipments to Japan have been strong so far in 2013, he added.

Wongchinda sees a 30 percent drop year-on-year in Thai seafood output in 2013 but believes 2014 will be a better year, with recovery in shrimp output. “In the meantime we are working hard to keep our market because if we lose it there’ll be no space for us.”

Thai shrimp production in 2013 is unlikely to exceed 300,000 meric tons compared with 500,000 (MT) produced last year, according to the UN-affiliated Food and Agriculture Organization (FAO), which in a recent report also noted the ex-farm price of vannamei was 60 percent to 85 percent higher than that of last year “and, as a result, exports of raw frozen shrimp became uneconomical for processors.”

Panita Boonyanandha, deputy director at the Thai Frozen Foods Association, told SeafoodSource her organization is expecting that 2013 shrimp export value will be largely flat on 2012 due to a combination of higher prices and more value added products.

One of her members, Kanokknang Pongsathaporn, senior marketing manager at Golden Sea Frozen Foods Co. explained to SeafoodSource that the firm had been able to stabilize earnings by increasing shipments of breaded shrimp cakes and rolls as well breaded straightened and peeled shrimp for EU and Western markets. Golden Sea is one of Thailand's leading shippers of frozen seafood, including black tiger and vannamei white and pink shrimps.

Thailand has little space to shift into other aquaculture-based seafood species. It’s proven “very hard” to beat China in shrimp production while Vietnam remains dominant low-cost neighbor with vast quantities of cheap catfish flooding into the Thai market, said Wongchinda. As for tilapia, “domestic consumption remains too high for us to have any realistic prospect of exporting [tilapia].”

Thailand is also seeking more opportunities for its tuna firms in places like China, which is embracing Japanese-type dining such as sushi. “We’ll have to do some work to adapt tuna for the different cooking traditions in China,” added Wongchinda.

Thailand’s shrimp and seafood sector remains dependent on exports given a delicate economic situation at home. The government in Bangkok cut its 2013 growth forecast as the country entered recession for the first time since the global financial crisis, with GDP shrinking 0.3 percent in the second quarter of 2013. Still, the Thai central bank is betting on 4.2 percent overall GDP growth in 2013, revising down an earlier estimation from 5.1 percent due to weaker exports and weaker consumer confidence.


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