Concerned that current low price levels may cause shrimp farmers in Thailand to reduce freshwater pond stocking, Thai Union Frozen Products (TUF) is implementing a shrimp price guarantee program. It is hoped that scheme will lead to a 20% increase in annual output over the 250,000 tons harvested last year.
“Without a guarantee, this could negatively affect the industry in the next three to four months. The impact would be felt domestically and internationally, as shrimp is one of Thailand’s top export items,” said Rittirong Boonmechote, president of the Bangkok-headquartered company’s global shrimp business.
He announced a program, which will be in effect through March of 2016, in which TUF has agreed to purchase 12,000 tons of shrimp at a guaranteed price of 150 baht per kilogram (approximately $4.20). Should the market price exceed that level, farmers would be free to sell to other buyers.
Thailand’s shrimp output during the first eight months of 2015 was 135,057 tons, up 18% over the same time frame in 2014.
Acquiring 100% of TUM
Meanwhile, TUF informed the Stock Exchange of Thailand on September 17 that it is acquiring the remaining 9.92% stake of Thai Union Manufacturing Company Limited (TUM). The assets are valued at 1,487,320,000 baht. Once the stock is purchased, TUF’s shareholding in the unit will be 100%.
