Written with positive shrimp enthusiasm and intent…..global helicopter view suggests possible different strategy.

Thailand still long way from a shrimp come back….but that should not necessarly be the current or long term strategic aim.

This report makes for an interesting read. With some nice info-graphics. Of course feed, water usage and solar are all aspects being looked at continually by all players globally involved in shrimp industry.

Link here to 61 page paper – some interesting figures plus a lot of repeats…

OK – so there is no case in this day and age for sustainability. It is and should always be mandatory – so no discussion. If a business is not sustainable it will disappear or find problems in markets – case in point Thailand.

Prawnmaster does not see that Thailand can revitalize its industry but does need to re-position to come in line with others and stabilize position. So still lots of work to do.

Prawnmaster does not see business opportunity in Thailand – integrated major players currently running 60% of the exports out of Thailand already did the smart business move and went global, regional in their businesses and, in parallel, entered into other sectors.

What’s gone is gone and for good reason and perhaps no need even to go back to trying to reach those same heights….read on.

Some comments here as reality check on report.

History first:

Yes Thailand shrimp industry is disjointed – the only outward reach for export is via processing facilities that are concentrated and were never really previously integrated as farmers.

The majority of shrimp farmers in Thailand were/are small scale and they used to have a guaranteed minimum price support from the Thailand government.

When this was removed the risks suddenly increased and many farmers, who did not have processing plant support (financing seed, feed and product off take) just did not stock. Result was a massive drop in production due to associated economic risks.

Industry (exporters) blamed disease but not so.

Thailand shrimp industry also, a decade ago, had access to other state support for growing exports….such as rebates per container exported, access to subsidized electricity and a blind eye to getting/using cheap fishmeal locally..

IUU came later but worse, in 2014 Thai seafood industry shown to be using slave/indentured labor. Allowed for an easy price competition used to gain market share.

UK supermarkets lapped up these cheaper Thai shrimp.

With exposure to malpractices in Thailand markets became wary. Certifying meant using shrimp feed with higher costs and, combined with no more state support for small farmers of course the disease card was used…..

Present:

Seafood Task Force good PR but Thai orientated. Situation has changed with all players tightening up acts but some reports in 2019 still show that there is still long way to go.

Markets still buy Thai as a great supplier of value added and own brand products.

Current thinking is Thailand will never get back its once lauded position on volume – and that is not a negative view though.

Economics per value chains step in BCG report is clearly for value added and treated shrimp…..

…yield on deheaded and peeled shrimp is 55%. Weight gain with chemicals 15% so brings back yield to 70%. Thai shrimp export price $8.85/kg and that is based on 1.3Kg = 1kg exported figure – in appendix.

So deduction is that these numbers shown are for shrimp chemically treated value added shrimp and which seems to be thrust of Thai industry – perhaps because so many processing plants were built to cover past supply/demand and not running at full capacity anymore.

These value added products tends to be for US and Northern European markets. Bigger volumes go to markets in China, Southern Europe and Japan….but for heads-on shrimp.

Future:

No point increasing production unless you are integrated. If you are then you are probably doing that anyway. Integrated guys have already hedged bets and are producing in other countries also.

Shrimp industry production players not integrated in Thailand should a) look to consolidate b) look at how to remove middlemen from equation c) develop local market consumption and maybe d) diversify back into growing Black Tiger again – different market sector to commodity vannamei.

Future markets will still grow as population grows but markets will decide source.

Current Thai production will adapt to market requirements. Intensification is just one option. Automation / robotics in processing is other.

Integrated business in Thailand already leading – in Thailand – but don’t expect others to follow.

Everyone globally already is or should be doing full traceability – not sure there is any competitive advantage arising for Thailand in that respect – but requirement for markets.

Thai shrimp industry is not pioneer in traceability. Other countries are more advanced.

That said traceability is important to address Thailand most pressing problem in shrimp farming – due to so many small farmers and middlemen – and that is that there is not good traceability.

Trail blazing needs to happen but it is done due to market pressure and using external technologies – it is something undertaken because markets demand it. More lag than lead.

Long term indoor farming will disrupt Thailand shrimp farming.

Long long term. Don’t forget shrimp farming is already a disruptive industry to fished shrimp as seafood.

Shrimp farming is globally responsive and flexible. Natural progression is intensification yes. Indoor farming is a continuation of this.

Indoor farming for export does not make sense for a marine tropical shrimp grown in a tropical country.

Indoor farming, by its very nature, can be done anywhere. Which is why CP (from Thailand) are doing an indoor farm in USA – close to markets.

Now that makes more sense…..and indirectly if demand is lowered in markets by locally grown shrimp than yes, then this may disrupt Thailand’s farmed shrimp exports in future.