Shrimp processors disagree with price
set in government price support programme for shrimp
By Jon Fernquest |
The Commerce Ministry has recently come up with a price support programme for shrimp in addition to the programme for rice that already exists.
Food processors have objected to the high prices set by the programme, saying that they "did not reflect genuine market prices," and have countered these prices by setting their own prices:
The weekly prices, based on farm production costs and export prices, will be announced every Monday and would be used as median prices for food processors and cold-storage operators to buy from farmers nationwide.
Recent falling prices for shrimp have been caused by "slow orders from the United States, the major shrimp importer that controls half of the market." The United States is currently experiencing an economic slowdown.
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Here is the article in full:
Processors to set own prices
Shrimp body disagrees with pledging schemeWALAILAK KEERATIPIPATPONG
Wednesday June 18, 2008
SURAT THANI: Seafood processors have countered the recent shrimp-pledging programme of the Commerce Ministry by setting their own weekly shrimp benchmark prices, which are lower than pledging prices. The weekly prices, based on farm production costs and export prices, will be announced every Monday and would be used as median prices for food processors and cold-storage operators to buy from farmers nationwide, according to Poj Aramwattananont, president of the Thai Frozen Foods Association.
To reduce potential pressure from the raisers, Mr Poj said the association would also persuade raisers nationwide to share their comments on the weekly prices.
The association disagrees with the pledging programme and sees it as an idea from giant agro-business groups.
"In the past, we've allowed parties not in the business to meddle with the industry. But now I want processors to work closely with farmers and set our own prices in order to stabilise shrimp prices in the long term," Mr Poj said at a meeting this week in Surat Thani where he met with farmers and cold-storage operators from upper southern provinces.
He said the pledging price agreed to earlier this month between groups of farmers and the Internal Trade Department of the Commerce Ministry did not reflect genuine market prices but was based on prices at the popular Mahachai seafood market, with inaccurate demand and supply figures.
As the association controls up to 70% of the local shrimp trade, it was justified in setting its own prices, he said.
The Internal Trade Department agreed on June 6 to use about 300 million baht to pledge a total of 10,000 tonnes of white shrimp or vannamei from farmers to prevent a further fall in shrimp prices.
The programme agrees to pay 140 baht per kilogramme for a size of 50 head per kg and 130 baht for 60 head per kg. The programme runs from June to October this year.
The attempt to announce weekly prices was intended to stabilise prices of the product, Mr Poj told more than 100 farmers from eight provinces in the upper south at the meeting.
The association's 31 member companies from Phuket, Surat Thani, Trang, Chumphon, Krabi, Phangnga, Ranong, and Nakhon Si Thammarat will be ready to use the new benchmark to buy shrimp from farmers.
For the first week, prices for the 50 shrimp/kg size will be 120 baht a kg, 20 baht lower than those offered in the pledging scheme.
According to Mr Poj, the falling domestic prices have stemmed mainly from slow orders from the United States, the major shrimp importer that controls half of the market. The US has accused the Thai industry of using forced and child labor in shrimping.
Officials from the US Homeland Security Department, representatives from the International Labor Organisation (ILO) and non-governmental organisations finished their investigation last week but the result of the inquiries hasn't been released.
The officials visited selected shrimp processing plants and peeling factories in Samut Sakhon, Samut Prakan and Rayong.
Mr Poj said that at the time the processors were dealing with the US officials, some in the shrimp raisers' association lobbied the Commerce Ministry hard to launch the pledging programme.
He said processors and exporters would join the scheme but only to allow use of their facilities to freeze the produce.
He has asked farmers to understand the falling market is because of the slow economy and the anti-dumping tariffs on exports to the United States of frozen shrimp from Thailand.
Thai shrimp production is projected to grow 6% this year to 530,000 tonnes and export volume to 350,000 tonnes.
The association plans to arrange meetings to inform cold-storage operators and farmers in the deep south, eastern, and central provinces of their new pricing scheme over the next three months.
Vocabulary:
price support programme - a government programme to ensure that farmers get paid a fair price for their goods
objected to - disagreed with, and stated this
shrimp body - shrimp organisation
countered - do something to have the opposite effect
shrimp-pledging programme - a government programme to support the price that shrimp farmers receive for their shrimp (the price of shrimp may go up and down, but farmers are often forced to sell quickly, and can't wait for a decent price to sell their produce, like the government can)
benchmark - a known and familiar quantity used as a standard for comparison
benchmark prices - prices used for comparison (well-known and familiar prices)
median - the middle value of a set of values
median prices - the middle price in a set of prices
food processors - companies who turn farmers' crops into food products bought in stores
cold-storage - refrigeration keeping food cold so that it doesn't spoil (See Wikipedia on refrigeration)
cold-storage operators - companies in the food refrigeration business
raisers, shrimp raisers - shrimp farmers (See Wikipedia on shrimp farm and aquaculture)
agro-business, agribusiness - the various businesses involved in food production, including farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales (See Wikipedia on agribusiness)
meddle with - interfere, try to change or influence something that is none of your business
stable - not changing or moving around a lot
stabilise - to make something stable (for example, stabilize prices so that producers know how much they will receive for their goods)
X reflects Y - X shows what Y is like
genuine - the real thing, authentic, not fake
did not reflect genuine market prices -
intended to - trying to, the reason for doing was
stemmed from - comes from, is caused by (See glossary)
stemmed mainly from slow orders from the United States -
US Homeland Security Department - department of the US government with the responsibility of protecting the territory of the US from terrorist attacks and responding to natural disasters (See Wikipedia)
International Labor Organisation (ILO) - the United Nations agency that deals with labour issues (See Wikipedia)
inquiries - questions asked
peeling - to pull something away from, and off of, a surface (for example, peeling the outside shell off of a shrimp)
lobbied - when different interest groups such as unions or large companies ask the government to take action on a problem
join the scheme - join the programme
facilities - buildings, equipment, or services provided for some function (See glossary)
dumping - in international trade, the pricing of a product below its cost of production (See Wikipedia)
anti-dumping tariffs - taxes on imports a government orders, when it believes there is dumping from some country
