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29 Jun 2005

Agriculture

Thai Shrimp Exports, 2005: Impact from EU GSP Postponement

คะแนนเฉลี่ย

The Office of Commercial Affairs in Brussels has reported that a meeting of the European Union Permanent Representatives Committee on June 21, 2005, proposed postponement of the restoration of the 2006-2015 round of the Generalized System of Preferences (GSP) to January 1, 2006, from the previous deadline of July 1, 2005. On June 27, 2005, the EU working group for this matter also split countries entitled to GSP into two groups, i.e., less developed countries ? whose GSP privileges will be restored on July 1, 2005 ? and developing countries, including Thailand and India, which will receive these privileges starting January 1, 2006. The fact that the European Commission resolved to postpone the GSP has taken a toll on Thailand's shrimp products. It seems that the hopes of Thai shrimp exporters that were pinned on the EU market to offset the ebbing exports to the US ? hampered by the US anti-dumping penalties ? have all but vanished.

Kasikorn Research Center (KRC) expects that exports of Thai shrimp products will be adversely affected by the EU decision. Even though the US will be reviewing the imposition of anti-dumping tariffs on shrimp products in October 2005, due to changing circumstances, Thai exports of shrimp products may not receive a windfall this year, particularly during the festivities celebrated in many countries at the end of the year when shrimp orders are normally high. It could thus be said that there will be no supportive factor for exports of Thai shrimp products this year, contrary to earlier expectations. Worse still, Thai shrimp products will face tough rivalry in the world markets, in particular, in the key markets like the US, Japan and the EU. Under these circumstances, Thai exports of shrimp products will undeniably see a drop in all these markets. It is forecast that the total export value of shrimp for 2005 will be around USD1,280 million, which, in comparison with 2004, represents a drop by 21.9 percent Previous forecasts stated that the shrimp product export value in early 2005 would reach USD1,803 million, or an increase by 10.0 percent. Therefore, this means that the Thai shrimp product export value for 2005 will be USD523 million less than expected, or a loss of over Baht20,000 million.

However, when considering the competition to Thai exports in major markets such as the US, EU and Japan, exporters of Thai shrimp products are still up against considerable rivalry from both existing producers and newer ones who have turned to shrimp farming for export.

Therefore, both the government and entrepreneurs must quickly adjust production capacity in order to lower Thai production costs, because shrimp importing countries now have more numerous alternatives to consider in pricing, which is primary import factor. Moreover, market penetration and expansion must be expedited by studying consumer behavior in each market to find ways to produce shrimp products that are best suited to consumer demand in each market, as well as there being a need to seek new export markets. Interesting possibilities include Canada, South Korea, Australia and Middle Eastern nations. At present, Thailand already exports shrimp products to these countries, but the export proportion is not yet very substantial. The above guidelines will help the export volume of shrimp and prawn products to expand and ensure domestic shrimp farmers' survival, because the export volume of shrimp and prawns accounts for 70 percent of the total shrimp and prawn production. Meanwhile, stimulating increased domestic shrimp consumption would also be another means to improve the price of domestic shrimp and prawns, somewhat.

Agriculture

Shrimp