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Seafood
 Blessed
with over 2500 kilometers of fertile coastline, Thailand has emerged
as one of the world’s leading suppliers of seafood products to the
world. Seafood exports from Thailand registered strong growth throughout
the 1990’s, with the largest purchasers being the United States,
Japan and Singapore. Recent disputes in seafood trade have resulted
in the levying of tariffs, non-tariff barriers and product bans
which have had serious effects on Thailand’s exports of these products.
Thailand
ranks as the world’s leading producer and exporter of shrimp products,
earning US$ 1.27 billion from international sales in 1999. While
restricted fishing areas and deteriorating stocks limit the amount
of shrimp available from fishing, shrimp farming in Thailand has
given processors an ample, steady source of the product.
Before
1984, the country harvested as much as 90 percent of its shrimp
from natural resources, mainly from the Gulf of Thailand. By 1987,
cultured shrimp production had taken off in the Kingdom, focusing
mainly on black tiger prawns. Government initiatives, along with
higher earnings potential, prompted numerous coastal farmers to
shift their production from rice to shrimp. The area utilized for
production has spread from the upper provinces bordering the Gulf,
to eastern and southern provinces, with cultured shrimp now making
up 70 percent of the total yield, 225,000 tons, produced in 1999.
The
pattern of shrimp exports finds 65 percent of the annual output
processed into frozen shrimp in the form of block or individual
quick frozen, and transported to the international market by refrigerated
cargo vessels taking 20-30 days to the United States, 7-10 days
to Japan and 30-45 days to Europe. The goods move through the distribution
system and are handled by various groups of importers including
brokers, supermarket outlets, retail importers and food processors.
The
export volume of shrimp has been growing for the past five years
when measured in Thai baht, but the figures have declined when measured
in U.S. dollars. While the devaluation of the Thai baht accounts
for a large proportion of the differential, other factors have recently
affected Thailand’s trade in shrimp products. Sales to the European
market have been hampered by the removal of GSP privileges, ending
the preferential tariffs Thai shrimp previously enjoyed. Tariffs
for Europe bound shrimp jumped from four percent to 14.4 percent
over a period of two years, which has resulted in a 75 percent decrease
in sales to the region since 1997. Economic recession in Japan over
the late part of the 90’s significantly damaged shrimp sales, although
it remains the second largest market trailing only the United States.
 The
outlook for the shrimp industry in Thailand appears to be quite
strong. Shrimp production is expected to increase in Thailand over
the coming years, while world output is expected to remain constant.
The second and third largest shrimp producing nations, Indonesia
and Ecuador, both suffer from a lack of technology in their shrimp
farming techniques. They mainly rely on traditional and semi-modernized
farms, which are prone to disease breakout and have relatively short
operational lives. These countries also suffer from unstable political
and economic regimes, which usually hinder foreign trade. The world
demand for shrimp stands at approximately 2.1 million tons per year
while output reaches only 800,000 tons, leaving 60 percent of the
demand unfilled.
These
factors have analysts forecasting three percent growth for Thailand’s
production and export of shrimp over the next few years. Focus in
Thailand has been on improving shrimp farming techniques to minimize
their environmental impact, as well as to extend the sustainability
and technology of their operations. The long-term success of the
industry in Thailand depends upon efforts in higher value added
products, an example being ready-to-eat, that are rising in popularity
in major markets. Improved marketing efforts, especially in establishing
known Thai brands would further benefit the industry.
The
largest subcategory within Thailand’s seafood industry is canned
seafood, in which the country also leads the world in terms of export
volume. Exports of canned seafood earned Thai companies U.S.$ 1.73
billion in 1999, with 30 percent growth having been registered over
the past five years.
While
Thailand’s export sales of canned tuna are impressive, the country
currently imports over 400,000 tons of frozen tuna to fill its needed
supply for processing. The country has only one deep-sea tuna vessel
purchased collectively by the Thai Oceanic Tuna Fisheries Cooperatives
(TOTFIC). Large foreign vessels, particularly from France and Taiwan,
are capitalizing on Thailand’s inability to effectively deep-sea
fish, and unload up to 5000 tons of tuna per shift at Phuket port,
most of which is caught in rich schools about 800 kilometers from
the island.
Analysts
believe that at least three more deep-sea vessels are needed to
encourage its canned seafood industry. Large Thai seafood exporters
are in the process of upgrading their fleets and forming ventures
with foreign companies who have expertise in the field of deep-sea
fishing. Until the upgrades are finished, Thailand will continue
to be reliant upon imported raw materials for its exports of canned
seafood products.
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