Floods in Thailand could be beneficial for Indian fish farmers. (Photo: YouTube,Channel4News/FIS)
Damage caused by flooding could benefit other exporting countries
Friday, November 04, 2011, 23:50 (GMT + 9)
The massive floods in Thailand could benefit other fish farmers such as India as they move to fill the gap in supply. At the same time, India's mackerel exports may fall, as Thailand was a major buyer.
As Thailand is a main producer of seafood, the effects of the floods are sure to be felt across the industry. Exporters have started moving shipments from the Bangkok port.
"Reports say floods have affected some aquaculture farms in low-lying areas. Cold storages and factories are also located in the region. Production may suffer," said Anwar Hashim, managing director of Abad Fisheries.
Indeed, Thailand's government has not drawn up clear measures to help manufacturers recommence production after the flood subsides, so export growth next year is expected to drop to a single digit for the first time since 2002, The Nation reports.
Exporters want the government to make sure affected factories will have workers to employ, as many left when operations were halted. They want the government to speed up the waiving of duties on machinery imports, facilitate cargo transport, help reduce shipping fees and offer soft and flexible loans to help businesses survive.
This should simplify the import of raw materials and semi-processed goods, which would be helpful because some industries, such as processed food, are dealing with a dearth of ingredients.
If flooding does not subside within the next month, plants will run out of raw materials.
"The flood damage is limited to central Thailand and Bangkok. The destruction may not have a major impact on global production," said TR Patnaik, chairman of Falcon Marine Exports.
But there is also concern about flooding in the South later this month, which could bring many shrimp hatcheries to ruin.
Prices would then be expected to increase due to suply chain disruptions.
In India, shrimp farms have ended up with surplus material this year and have thus had to sell their product at a low price to Vietnam due to lower demand in the US and Japan, which drove prices down. The seafood industry thinks the impact is yet to come, as a hefty part of consignments for the Christmas and New Year holidays have already been shipped out, The Economic Times reports.
The prices of farmed shrimp and especially vannamei have remained somewhat stable this year.
Thailand along with other South East Asian countries accounts for 16 per cent of Indian seafood exports, which has helped India deal with the financial crisis hitting the US and Europe. Thailand has become a big buyer of mackerel and ribbon fish.
- Shrimp harvests up amid global shortage
By Natalia Real