Thai Shrimps in the World Production and Market. Songsak Sriboonchitta, Kusol Thong-ngam and Akarapong Untong

Transcription

1 International Symposium Agribusiness Management towards Strengthening Agricultural Development and Trade III : Agribusiness Research on Marketing and Trade Thai Shrimps in the World Production and Market by Songsak Sriboonchitta, Kusol Thong-ngam and Akarapong Untong Multiple Cropping Center, Chiang Mai University National Chung Hsing University The Ministry of Agriculture and Cooperatives 2001

2 III : Thai Shrimps in the World Production and Market 103 Thai Shrimps in the World Production and Market Songsak Sriboonchitta 1, Kusol Thong-ngam 2, Akarapong Untong 3 Abstract This paper attempts to present the situation of world shrimp production and the production volume of shrimp by the major producing countries in comparison to the situation in Thailand. The export and import markets are investigated. Technical efficiency and total factor productivity of Thailand are compared with other Asian producing countries. The backward price transmitted from Japanese wholesalers to Thai packers is found efficient. Thailand has a very high availability of deep-freezing technology in favor of the raw shrimp quality control, with low variable costs of deepfreezing activity, making the cost of production (at a given high quality of products) relatively low. The quality of shrimp products from Thailand is considered high quality. The price elasticities of demand for Thai shrimps in the US and Japanese markets are inelastic. The income elasticity of demand for Thai shrimps in the US is elastic while that in the Japanese market is inelastic. Hedonic price equations of shrimps are analyzed. The information involving disease outbreaks is shown and estimated shrimp farm losses in Asian countries are presented. Farm performance of intensive farming from various Asian countries is explored. Finally, Thailand and Sri Lanka have strong comparative advantages in shrimp farming. Keywords: Thailand, shrimp, efficiency, hedonic price, quality, intensive farm 1. World Shrimp Production The world shrimp production in 1998 was 3,827,337 tons % of the total shrimp production in 1998 was from shrimp culture farming. However the growth rate of the cultured shrimp production was at 15.4% compared with 3.2% from captured production (Table 1). Thailand was no.4 in terms of production size after China, Indonesia and India, with the rate of growth of production at 7.8% a year, the 5 th after Bangladesh, Ecuador, China, Vietnam and Indonesia (Table 2). The shrimp production share of Thailand was at a peak at 12.1% in 1 Lecturer, School of Economics and Multiple Cropping Center, Chiang Mai University, Thailand 2 Researcher, Multiple Cropping Center, Chiang Mai University,Thailand 3 Research assistant, Multiple Cropping Center, Chiang Mai University, Thailand

3 104 Agribusiness Management towards Strengthening Agricultural Development and Trade 1994 before declining to 9.6% in 1998 while China had an increasing trend and reached a maximum at 25.4% in 1998 (Table 3). Table 1 Production Volumes of Shrimp from Capture and Aquaculture Year Production (metric tons) Ratio (percent) Aquaculture Capture Total Aquaculture Capture Total ,292 1,770,176 1,942, ,647 1,957,344 2,170, ,683 1,977,460 2,297, ,799 1,940,911 2,434, ,453 1,998,856 2,575, ,502 1,960,169 2,580, ,997 1,967,500 2,639, ,176 2,054,824 2,887, ,678 2,112,607 3,002, ,697 2,081,805 2,929, ,685 2,287,289 3,177, ,593 2,336,835 3,288, ,054 2,454,989 3,415, ,000,565 2,600,256 3,600, ,113,887 2,713,450 3,827, GWT AVG Source : FAO Fisheries Department, 2000 Notes : GWT is average growth rate per year ( ) AVG is average value

4 III : Thai Shrimps in the World Production and Market 105 Table 2 Production Volume of Shrimp by the Major Producing Countries Unit: Metric tons Year Bangladesh China Ecuador India Indonesia Mexico Thailand Vietnam Others World , ,482 39, , ,967 76, ,211 47,000 1,035,389 1,942, , ,957 36, , ,164 74, ,290 50,000 1,110,982 2,170, , ,595 52, , ,905 73, ,472 58,000 1,140,000 2,297, , ,696 78, , ,102 83, ,822 68,990 1,173,541 2,434, , ,825 82, , ,836 73, ,522 79,860 1,121,464 2,575, , ,355 77, , ,884 76, ,130 78,730 1,149,865 2,580, , ,154 84, , ,953 62, ,357 83,200 1,130,161 2,639, , , , , ,462 70, ,862 92,500 1,133,610 2,887, , , , , ,150 66, ,565 94,500 1,217,315 3,002, , ,752 97, , ,698 79, , ,000 1,198,383 2,929, , ,053 98, , ,736 77, , ,000 1,182,912 3,177, , , , , ,478 85, , ,000 1,227,146 3,288, , , , , ,130 78, , ,000 1,243,895 3,415, , , , , ,241 88, , ,000 1,211,525 3,600, , , , , ,970 90, , ,000 1,206,565 3,827,337 GWT Source : FAO Fisheries Department, 2000 Note : GWT is average growth rate per year ( )

5 106 Agribusiness Management towards Strengthening Agricultural Development and Trade Table 3 Shares of Total Production of the Major Producing Countries Unit: Percent Year Bangladesh China Ecuador India Indonesia Mexico Thailand Vietnam Others World AVG Source : Calculation by using the data from FAO Fisheries Department, 2000 Note : AVG is average value

6 III : Thai Shrimps in the World Production and Market 107 If we consider only cultured shrimp production, Thailand had the highest share in 1998 at 21.9% but the average share from was second after China (Table 4). Considering only the production of black tiger shrimps, Thailand has been no.1 since 1991 and reached 242,000 tons in 1998 (Table 5) with production share of 32.8% while our competitors' India and Indonesia shares were 28.3% and 17.4% respectively in the same year (Table 6). Table 4 Shares of Shrimp Production from Aquaculture of the Major Producing Countries Unit: Percent Year Bangladesh China Ecuador India Indonesia Mexico Thailand Vietnam Others World AVG Source : Calculation by using the data from FAO Fisheries Department, 2000 Note : AVG is average value

7 108 Agribusiness Management towards Strengthening Agricultural Development and Trade Table 5 Production Volume of Black Tiger Shrimps of the Major Producing Countries Unit: Metric tons Year India Indonesia Philippines Taiwan Thailand Vietnam Others World ,000 24,527 26,357 12, , , ,000 23,549 26,537 17, , , ,000 29,521 27,980 45,817 1,179 9, , ,000 35,922 32,380 80,279 10,839 14,240 1, , ,38 56,751 41,548 31,171 41,167 20,590 2, , ,45 75,679 43,539 16,982 81,886 21,020 7, , ,64 79,002 47,591 9, ,318 23,250 7, , ,34 110,554 45,740 10, ,400 26,700 9, , ,57 114,007 75,996 10, ,754 28,350 11, , ,67 103,401 86,096 8, ,436 31,500 12, , ,63 100,153 91,642 7, ,724 33,750 14, , ,28 113,845 89,281 11, ,062 39,000 18, , ,43 115,630 76,580 12, ,503 45,000 19, , ,66 122,246 40,633 5, ,056 81,000 23, , ,72 128,050 37,339 4, ,000 87,000 29, ,198 GWT Source Note : FAO Fisheries Department, 2000 : GWT is average growth rate per year ( )

8 III : Thai Shrimps in the World Production and Market 109 Table 6 Shares of Black Tiger Shrimp Production of the Major Producing Countries Unit : Percent Year India Indonesia Philippines Taiwan Thailand Vietnam Others World AVG Source : Calculation by using the data from FAO Fisheries Department, 2000 Note : AVG is average value

9 110 Agribusiness Management towards Strengthening Agricultural Development and Trade For cultured black tiger shrimps, Thailand has been no.1 since 1989 (overtaking Indonesia in that year) and reached 240,000 tons in 1998 (Table 7) with the cultured production share of 41.5% substantially outpacing our competitors Indonesia, Vietnam and India whose cultured production shares are 17.9%, 15.1% and 14.0% respectively in the same year (Table 8). Table 7 Production Volume of Black Tiger Shrimps from Aquaculture of the Major Producing Countries Unit : Metric tons Year India Indonesia Philippines Taiwan Thailand Vietnam Others World ,000 10,318 26,357 10, , , ,000 13,068 26,537 16, , , ,000 15,424 27,980 44, , , ,000 25,202 32,380 78,548 10,544 14,240 1, , ,000 44,450 41,458 30,603 40,774 20,590 2, , ,000 63,676 43,539 16,672 81,492 21,020 3, , ,985 67,355 47,591 8, ,970 23,250 3, , ,500 96,811 45,740 10, ,069 26,700 5, , ,000 98,358 75,996 10, ,358 28,350 6, , ,200 87,285 86,096 8, ,900 31,500 8, , ,168 83,193 90,426 7, ,724 33,750 11, , ,317 89,344 88,850 10, ,062 39,000 13, , ,990 96,237 76,220 12, ,875 45,000 15, , ,307 96,317 40,102 5, ,551 81,000 19, , , ,300 36,799 4, ,000 87,000 25, ,990 GWT Source : FAO Fisheries Department, 2000 Note : GWT is average growth rate per year ( )

10 III : Thai Shrimps in the World Production and Market 111 Table 8 Shares of Black Tiger Shrimp Production from Aquaculture of the Major Producing Countries Unit : Percent Year India Indonesia Philippines Taiwan Thailand Vietnam Others World AVG Source : Calculation by using the data from FAO Fisheries Department, 2000 Note : AVG is average value

11 112 Agribusiness Management towards Strengthening Agricultural Development and Trade 2. Shrimp Export and the Import Markets 2.1 Export In terms of market share of frozen shrimp export, Thailand has been no.1 since 1991 and reached a peak with the highest share in 1994 and 1995 (17.2% for both years) before declining to 13.2% in 1998 but still holding no.1 in the world market. Thailand's competitors in the frozen shrimp export market are Indonesia, Ecuador, India, Mexico and Vietnam (Table 9-10). Table 9 Export Volume of Frozen Shrimps of the Major Exporting Countries Unit : Metric tons Year Bangladesh China Ecuador India Indonesia Mexico Thailand Vietnam Others World ,563 13,500 19,073 55,194 26,171 33,666 19,428 11, , , ,255 10,000 20,172 49,540 27,798 30,411 24,041 16, , , ,448 32,000 30,683 52,131 33,931 31,694 28,717 19, , , ,113 63,971 48,912 51,629 40,794 35,425 53,911 21, , , , ,984 49,746 55,973 53,002 21,071 42,841 30, , , ,585 94,970 46,894 61,746 67,568 25,900 68,510 21, , , , ,843 58,050 61,896 85,315 17,682 79,983 30, , , ,203 86,028 79,761 83,409 85,180 17, ,714 40, , , ,849 90,097 84,022 78,409 82,265 17, ,324 48, , , ,191 64,461 71,204 96,130 85,232 23, ,709 55, , , ,314 60,898 71, ,459 83,788 31, ,545 63, ,301 1,038, ,741 47,052 86,413 98,456 76,565 36, ,661 38, , , ,579 35,071 85, ,681 79,589 35, ,974 38, , , ,425 43, , ,426 77,642 35, ,066 44, ,432 1,003, ,875 38, , , ,888 46, ,379 46, ,123 1,113,910 GWT Source : FAO Fisheries Department, 2000 Note : GWT is average growth rate per year ( )

12 III : Thai Shrimps in the World Production and Market 113 Table 10 Shares of Frozen Shrimp Export of the Major Exporting Countries Unit : Percent Year Bangladesh China Ecuador India Indonesia Mexico Thailand Vietnam Others World AVG Source : Calculation by using the data from FAO Fisheries Department, 2000 Note : AVG is average value

13 114 Agribusiness Management towards Strengthening Agricultural Development and Trade 2.2 Import Markets In 1984, Japan was the no.1 largest importer of frozen shrimps while the US and Europe were no.2 and no.3 respectively. However since 1991 Europe was no.1 at that time Japan no.2 while the US was still no.3. In 1998 Japan slipped to No.3 and the US regained no.2 with a 2 nd year of import volume growth. The market share of frozen shrimp import for Europe, the US and Japan were 33.5%, 25.3% and 22.3% respectively in In that year Europe increased imports by 15.4% over 1997 (an increase of 55,190 tons) (Table 11-12). Table 11 Import Volume of Frozen Shrimps of the Major Importing Countries Unit : Metric tons Year Japan USA EU Hong Kong Australia China Singapore Taiwan Others World , , ,063 23,372 3,194-17,333-29, , , , ,859 28,445 4,513-16,671-32, , , , ,758 40,938 4,402-19, , , , , ,118 49,903 6, , , , , , ,570 68,034 4, , , , , , ,202 61,126 5, ,270 1,316 48, , , , ,176 54,699 5, ,236 1,200 56, , , , ,118 44,884 6, ,966 2,132 63, , , , ,713 37,595 6,772 2,520 21,814 6,869 64, , , , ,418 28,417 6,590 3,111 22,781 12,191 79,639 1,007, , , ,537 33,191 8,304 13,640 23,515 16,129 71,915 1,068, , , ,061 28,817 7,928 12,196 9,001 14,475 91,205 1,003, , , ,963 29,687 8,071 14,628 8,426 13, ,186 1,034, , , ,514 23,019 13,523 13,986 7,029 18, ,600 1,014, , , ,706 22,044 14,531 15,143 6,264 14, ,134 1,072,723 GWT Source : FAO Fisheries Department, 2000 Note : GWT is average growth rate per year ( )

14 III : Thai Shrimps in the World Production and Market 115 Table 12 Shares of Frozen Shrimp Import of the Major Importing Countries Unit : Percent Year Japan USA EU Hong Kong Australia China Singapore Taiwan Others World AVG Source : Calculation by using the data from FAO Fisheries Department, 2000 Note : AVG is average value

15 116 Agribusiness Management towards Strengthening Agricultural Development and Trade 3. Technical Efficiency and Total Factor Productivity Compared with Asian Producing Countries For intensive farming the efficiency index for Thailand is 0.59 (Table 13) This implies that Thailand still has a substantial opportunity to increase efficiency and hence lower the cost of production which could strengthen Thailand s competitiveness in the world market. Also Thailand has a low productivity index. This also implies that Thailand has great opportunity to increase the productivity when compared to the other producing countries. This opens an opportunity for Thailand to lower her costs of production. Table 13 Inter-Country Productivity and Efficiency Comparisons: Shrimp Culture Country Extensive shrimp Semi-intensive Intensive Productivity index Efficiency index Productivity index Efficiency index Productivity index Bangladesh Efficiency index Cambodia China India Indonesia Korea Malaysia Myanmar Philippines Sri Lanka Taiwan Thailand Vietnam Source: ADB / NACA (1998) Notes: Productivity Index is a relative cost index indicating how much more or less costly a country is, as compared to the reference country (the Philippines). Efficiency Index measures the technical efficiency of the use of three major inputs (labor, feed and seed); a value of 1 indicates the country is on the efficient frontier.

16 III : Thai Shrimps in the World Production and Market Efficiency of the Market The forward price transmission from Thai packers to the wholesalers in Japan is not efficient whereas the backward price transmitted from Japanese wholesalers to Thai packers is efficient. So the Thai government does not have to do anything to improve the price mechanism (Table 14-16). Table 14 Estimates of Forward Price Transmission Equation from Thailand to Japan : Long - Run Price Relationship Shrimp size Const lnp T t σ J t R 2 D.W. Wald Test Size of count Size of count Size of count ** ( ) ** ( ) ** (7.6121) Source: Sriboonchitta and Wiboonpongse (1999a) Notes: ** ( ) ** ( ) ** ( ) (0.2182) (0.4400) ( ) ** ** ** Numbers in parentheses are t-statistic ** significance at the 1% level and * at the 5% level. Wald statistic are Chi-square statistic ** significance at the 1% level and * at the 5% level. Table 15 Estimates of Backward Price Transmission Equation from Japan to Thailand : Long - Run Price Relationship Shrimp size Const LnP J t σ T t R 2 D.W. Wald Test Size of count Size of count Size of count ** ( ) ** ( ) ** ( ) Source: Sriboonchitta and Wiboonpongse (1999a) Notes: ** ( ) ** ( ) ** ( ) (0.3593) ( ) ( ) ** ** ** Numbers in parentheses are t-statistics ** significance at the 1% level and * at the 5% level. Wald statistics are Chi-square statistic s ** significance at the 1% level and * at the 5% level.

17 118 Agribusiness Management towards Strengthening Agricultural Development and Trade Table 16 Testing coefficients of Ln P and Ln P in the long run forward and T t J t backward price transmission relationships respectively if they are equal to 1; H 0 : α JT 2 = 1 and H TJ 0 : α JT =1 2 where α 2 = the coefficient of Ln P T t in forward TJ price transmission equation and α 2 = the coefficient of Ln P J t in the backward price transmission equation Shrimp size α 2 t-statistic F-statistic Chi-square Forward H 0 : 0 Size of count Size of count Size of count α JT 2 = H0 : α JT 2 = 1 H0 : α JT 2 = (0.0000) (0.0000) (0.0000) Backward H 0 : (0.0000) (0.0001) (0.0000) (0.0000) (0.0000) (0.0000) α TJ 2 = H0 : α TJ 2 = 1 H0 : α TJ 2 = 1 Size of count (0.0000) Size of count (0.0000) Size of count (0.0000) Source: Sriboonchitta and Wiboonpongse, 1999a Note: Numbers in parentheses are probability significance levels (0.0335) (0.7607) (0.3951) (0.0318) (0.7602) (0.3932) 5. Raw Material Quality Control Thailand has very high deep - freezing technology in favor of the raw shrimp quality control. Thailand also has low variable cost of deep - freezing activity that makes the cost of production at a given high quality of products relatively low. So the semi processed or processed products have a relatively low cost of production, which makes products from Thailand highly competitive in the world market for high quality products.

18 III : Thai Shrimps in the World Production and Market Quality of the Products The quality of the products from Thailand could be viewed in at least in four favorable aspects. 1. Freshness. The very high level of technology for deep freezing in Thailand makes the raw material always fresh and hence the semi-processed and processed products. 2. Sanitation in the production process is extremely well managed. 3. "No contamination" conditions which are trusted by importers. 4. Food safety management is rigorous. 7. Shrimp Consumption in US and Japanese Markets Consumption per head in the Japanese market reached the maximum in 1993 at kg/head from kg/head before declining to kg/head in 1997 (Table 17). Meanwhile the consumption per head in the US market had an increasing trend starting from kg/head in 1976 to kg/head in 1997, 75.51% increase during 21 years or 3.6% a year (simple average) (Table 18). This implies that there could be about 78.4% for the consumption per head in the US market to reach the maximum level, assuming that the consumption per head between Japanese and US markets is the same. Real income and relative price of shrimps are significant variables in determining the quantity demanded of shrimps. Both income and price elasticities (in absolute terms) in the US market were greater than those in the Japanese market (Sriboonchitta and Wiboonpongse, 2000a). The income elasticity in the US market was (Table 19) while that in the Japanese market was lower at (Table 20). This implied that the demand in the US market was more sensitive to changes in income than in the Japanese market. When the economy is booming the opportunity is open more for the US economy than the Japanese and vice versa. Also the quantity demanded in the US market was more sensitive to price changes than in the Japanese market. It implied that with changes in the price of 1%, the quantity demanded in the US market would move more in the opposite direction than that in the Japanese market. So exporters should be aware of the price change effect on quantity demanded in the US market and the same in the Japanese market.

19 120 Agribusiness Management towards Strengthening Agricultural Development and Trade Table 17 Import Quantity, Import Value, Population, Consumption per Head, National Income, National Income per Head and Consumer Price Index of Japan Year Import Quantity (tons) Import Value (billion of yen) Population (million) Consumption per head (kg/head) National Income (billion of yen) National Income per head (yen/ head) Consumer Price Index , , , ,475, , , , ,629, , ,008, , ,779, , ,380, , ,914, , ,067, , ,055, , ,228, , ,187, , ,317, , ,284, , ,268, , ,364, , ,272, , ,507, , ,330, , ,661, , ,835, , ,764, , ,324, , ,871, , ,559, , ,048, , ,259, , ,241, , ,490, , ,461, , ,633, , ,667, , ,487, , ,759, , ,946, , ,772, , ,324, , ,786, , ,538, , ,857, , ,130, , ,047, , ,957, , ,046, , ,572, , ,463, Sources : Value and quantity import, consumption during from FAO Fisheries Department Fisheries Information. Fishstat Plus, V Data and Statistic.Unit. ( : Value and quantity import during from National Marine Fisheries Service (NMFS) ( : Population, Nation Income and Consumer Price Index from International Monetary Fund

20 III : Thai Shrimps in the World Production and Market 121 Table 18 Import Quantity, Import Value, Population, Consumption per Head, National Income, National Income per Head and Consumer Price Index of USA Year Import Quantity (tons) Import Value ($ billion) Population (million) Consumption per head (kg/head) National Income ($ billion ) National Income per head ($/head) Consumer Price Index , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,114, , , , ,119, , , , ,039, , , , ,301, , , , ,537, , , , ,581, , , , ,681, , , , ,588, , , , ,788, , , , ,964, , , , ,079, , , , ,542, , , , ,416, , , , ,204, , , , ,630, , , , ,837, , ,388, Sources : Value and quantity import, consumption during from FAO Fisheries Department Fisheries Information. Fishstat Plus, V Data and Statistic.Unit. ( : Value and quantity import during from National Marine Fisheries Service (NMFS) ( : Population, Nation Income and Consumer Price Index from International Monetary Fund

21 122 Agribusiness Management towards Strengthening Agricultural Development and Trade Table 19 Estimates of Coefficients of Consumption Function of Frozen Shrimp in USA Variable Coefficient t-statistic Constant * ln( PNI / CPI ) t t *** ln( C.I.Ft / CPIt ) *** R 2 = 0.87 R 2 = Source: Sriboonchitta and Wiboonpongse (1999b) Notes: ***Statistical significance at the 1% level **at the 5% level and *at the 10% level. D.W. = 1.49 F statistic = 64.71*** Table 20 Estimates of Coefficients of Consumption Function of Frozen Shrimp in Japan Variable Coefficient t-statistic Constant *** ln( PNIt / CPIt ) *** ln( C.I.Ft / CPIt ) ** R 2 = 0.95 R 2 = D.W. = F statistic = *** Source: Sriboonchitta and Wiboonpongse (1999b) Notes: ***Statistical significance at the 1% level **at the 5% level and *at the 10% level. Ferdouse (1999) cited that the per capita consumption of shrimps in Japan leveled off in 1995 as the market reached a saturation point and has remained fairly static in the past five years. However import value has risen compared to the volume, mainly due to increasing imports of value - added products. These include semi - processed and processed products such as headless tray packed shrimp, PTO nobashi, IOF easy - peel, breaded tempura, sushi and cooked shrimp for catering and retail sectors. Supermarkets have set up their own buying houses to import products directly from producing countries. Ferdouse (1999) also added that escalating shrimp prices and consumer preference for cheaper products are forcing Japanese buyers to look for alternative and cheaper sources of such products. In recent years Vietnam, Indonesia, India and lately, Bangladesh, have attracted more attention due to the improved quality and cheaper price of their product as compared to Thailand. He also noted that although the Japanese yen was stronger, buying was still dormant as the

22 III : Thai Shrimps in the World Production and Market 123 market was price - sensitive. His comment was consistent with the research result found by Sriboonchitta and Wiboonpongse (1999b) that the price elasticity of demand in the Japanese market was relatively inelastic. A little change in the quantity of supply would result in a dramatic change in the price. Lower cost of production would cut the price down severely. Since the price elasticity of demand in the big markets such as the US was more sensitive, the exporter should be aware of the price cutting policy from competitors because the demand would be reduced more severely in favor of the competitors. 8. Hedonic Price Equations of Shrimps In the Japanese market, the price of black tiger shrimps size no. 3 (26-30 shrimps / pound) has an increasing trend while size no. 1 (16-20 shrimps / pound) and size no. 2 (21-25 shrimps / pound) have a decreasing trend. This is because the escalation of shrimp prices and consumer preference for cheaper products are forcing Japanese buyers to look for alternative and cheaper sources of such products. In contrast, all prices of black tiger shrimps from size no. 1 to size no. 3 have an increasing trend in the US market. However the better the quality, the higher the price increase rates in the price trend (see Table 21-22).

23 124 Agribusiness Management towards Strengthening Agricultural Development and Trade Table 21 Hedonic Price Equation in the Japanese Market with Cochrane-Orcutt Iterative Method 2 R = 0.60 a ln APˆ C = -.074, Variable Coefficient t-statistic Constant *** D *** D D *** D D t ** D 1* t D 2* t D 3* t D 4* t ** D 5* t D 1*D D 2*D D 1*D 5*t D 2*D 5*t D 1*D * D 2*D D 1*D 4*t * D 2*D 4*t R = 0.59 F = *** DW = 2.36 A ÎC = a Source : Sriboonchitta and Wiboonpongse, 1999c. Notes: *** Statistical significance at the 1% level ** at the 5% level and *at the 10% level a calculate from LIMDEP version 7.0 by transform data as rho from to repair autocorrelation as use Cochrane Orcutt method

24 III : Thai Shrimps in the World Production and Market 125 Table 22 Hedonic Price in the USA Market with Cochrane-Orcutt Iterative Method. Variable Coefficient t-statistic Constant *** D *** D D D D D *** t *** D 1* t * D 2* t D 3* t ** D 4* t D 5* t D 6* t *** D 3*D D 3*D D 4*D D 4*D D 5*D D 5*D D 3*D 1*t D 3*D 2*t D 4*D 1*t *** D 4*D 2*t D 5*D 1*t D 5*D 2*t R = lnapˆ C a =, 2 R = F = *** DW = 1.96 A Î C = 2.40 a Source : Sriboonchitta and Wiboonpongse (1999c). Notes: *** Statistical significance at the 1% level, **at the 5% level and *at the 10% level. a calculate from LIMDEP version 7.0 by transform data as rho from to repair autocorrelation as use Cochrane Orcutt method

25 126 Agribusiness Management towards Strengthening Agricultural Development and Trade 9. Disease Outbreaks Shrimp disease causes a significant loss to shrimp farmers. ADB/NACA (1998) estimated a total financial loss attributed by farmers of $145.9 million to intensive shrimp farmers; $121.1 million to semi - intensive farmers; and $67.2 million to extensive farmers. ADB/NACA (1998) noted that these financial losses are likely to be an underestimate because it did not include the financial losses on shrimp farms which were not in use because of serious disease problems (Table 23-24). Sriboonchitta and Wiboonpongse (1999b) have estimated the financial loss due to disease outbreaks of $ million a year for intensive farming which shared about 90% of the total shrimp farming. So one of the ways to reduce the cost of production is to reduce disease. The issues for research is how to prevent shrimp farming from contracting those diseases and if those diseases break out, how to cure them effectively with the lowest cost (Table 25). Table 23 Shrimp Disease Problems Experienced by Intensive Shrimp Farmers (% of Farms Affected by Stratum and Annual Financial Loss by Affected Farm) Country % of farms rep Freq /yr First exper'd (year) Impact of disease (% of affected farms) Total loss (%) Red harv. (%) Red. Price (%) Financial loss $/farm/year $/ha/yr Cambodia ,673 2,100 China , India ,945 1,316 Indonesia ,435 2,455 Korea ,765 3,246 Malaysia ,039 1,156 Philippines , Sri Lanka ,241 8,444 Taiwan a/ Thailand ,336 6,196 Mean ,628 2,312 Source : ADB / NACA (1998) Notes: a/ N0 financial loss data were available

26 III : Thai Shrimps in the World Production and Market 127 Table 24 Shrimp Disease Problems Experienced by Semi - Intensive Shrimp Farmers (% of Farms Affected by Stratum and Annual Financial Loss by Affected Farm) Country % of farms rep Freq /yr First exper'd (year) Impact of disease (% of affected farms) Total loss (%) Red harv. (%) Red. Price (%) Financial loss $/farm/year $/ha/yr Bangladesh ,928 6,440 China , India ,458 6,799 Indonesia ,936 1,063 Malaysia ,652 4,276 Philippines , Sri Lanka ,945 1,462 Vietnam , Mean ,586 2,195 Source : ADB / NACA, 1998 Table 25 Shrimp Disease Problems Experienced by Extensive Shrimp Farmers (% of Farms Affected by Stratum and Annual Financial Loss by Affected Farm) Country % of farms rep Freq /yr First exper'd (year) Impact of disease (% of affected farms) Financial loss Total loss (%) Red harv. (%) Red. Price (%) $/farm/year $/ha/yr Bangladesh China India Indonesia Myanmar Philippines Sri Lanka Thailand Vietnam Mean Source: ADB / NACA, 1998

27 128 Agribusiness Management towards Strengthening Agricultural Development and Trade 10. Other Problems The other main problems reported from the survey by ADB/NACA (1998) were seed quality and quantity, which were the most commonly quoted problem in several regional countries. Other problems included those related to feed quality and quantity (India), poaching, and lack of experience and technology (reported in China) (ADB/NACA, 1998). 11. National Losses The losses estimated by ADB/NACA (1998) have been classified into three groups; environmental loss, other loss and total loss. The environmental loss consists of losses from four categories, i.e., disease, water quality, water quantity and soil. These four categories contributed over 90% of all losses. Details are shown in the table 26. Table 26 Estimated Shrimp Farm Losses as a Proportion of Output All Strata Country Shrimp sales ($ mil) Environmental loss Other loss Total loss $ mil % $ mil % $ mil % Bangladesh Cambodia China India Indonesia Korea Malaysia Myanmar Philippines Sri Lanka Taiwan 50.3 na na na na na na Thailand Vietnam Total Source: ADB / NACA, 1998

28 III : Thai Shrimps in the World Production and Market Farm Performance of Intensive Farms 12.1 Production The average yield is the highest at 5,646 kg/ha/crop in Thailand and followed by Sri Lanka at 4,486 kg/ha/crop. The average price per kg in Thailand is at $6.89 a kg while in Sri Lanka $8.65. However the culture period in Thailand is less than Sri Lanka at 120 days per crop while Sri Lanka has 134 days. Thus, Thailand has more revenue per hectare per crop per day than Sri Lanka (Table 27). Table 27 Annual Physical Performance by Intensive Shrimp Farms Country Pond area Area stocked Area harvested Culture period Crops/ yr Total prod'n Av. yield Av. price (ha) (Ha) (Ha) (days/crop) (No.) (kg/farm/yr) (kg/ha/crop) ($/kg) Cambodia , , China , , India , , Indonesia , , Korea , Malaysia , , Philippines , , Sri Lanka , , Taiwan , , Thailand , , Mean , , Source: ADB / NACA, 1998

29 130 Agribusiness Management towards Strengthening Agricultural Development and Trade 12.2 Financial Performance Sri Lanka has both more net and cash margins compared to Thailand (Table 28). Table 28 Summary of Intensive Shrimp Farm Growout Pond Performance Country Total farm output Labor Feed Seed Other Overhead Net margin ($ 1,000 / ha) Cash margin Cambodia China India Indonesia Korea Malaysia Philippines Sri Lanka Taiwan Thailand Mean % Cambodia China India Indonesia Korea Malaysia Philippines Sri Lanka Taiwan Thailand Mean Source : ADB / NACA, 1998

30 III : Thai Shrimps in the World Production and Market Capital The land cost in Thailand is the second highest after ROC However, the total fixed cost of capital is the third highest after ROC and India. The return on capital ranks no.4 among 10 producing countries (Table 29). Table 29 Capital Cost per Intensive Shrimp Farm and per Hectare Country Farm value Total cap. Land cost Earthworks Veh/eqpt other ($1,000) ($1,000) ($1,000/ha) ($1,000/ha) ($1,000/ha) ($1,000/ha) Total fixed cap. Work'g cap. ($1,000/ha) Ret'n on cap. ($1,000/ha) (%) Cambodia na China India 1, Indonesia Korea 3, Malaysia Philippines na Sri Lanka Taiwan Thailand Mean Source : ADB / NACA, Credit ADB/NACA (1998) cited that the credit estimates were one of the weaker parts of the farm survey and the results summarized in Table 30 should be interpreted with caution. Thailand had the highest percentage of indebted farms followed by Malaysia. However, the average loans of these two countries were relatively low. India, Indonesia and Korea reported high debt levels (ADB/NACA, 1998).

31 132 Agribusiness Management towards Strengthening Agricultural Development and Trade Table 30 Credit Situation of Intensive Shrimp Farms Country Capital costs Total ($1,000) /ha ponds ($1,000) % indtd farms (%) Av load/indtd ($) Av int. rate (%) Av indebtedness ($) Est. equity (%) Cambodia na China na India Indonesia Korea na Malaysia Philippines Sri Lanka Taiwan na Thailand Mean Source : ADB / NACA (1998) 12.5 Cost Structure per Kilogram of Asian Intensive Shrimp Farms by Country The major component in the cost of production is feed among Asian producing countries ranging from 22.6% in Taiwan to 54.2% in Sri Lanka. Thailand is the third highest percentage feed cost to the total production cost at 45.3%. The farm gate price of shrimp per kg in Thailand ranks five from eight producing countries at 6.89 dollars/kg with the average price of 7.58 dollars/kg (Table 31). Among three major frozen shrimp exporting countries in Asia, i.e., Thailand, Indonesia and India. Thailand has the lowest cost of production and the highest farm gate price hence the profit per kg. This implies that Thailand is still strongly competitive in the world market. It should be noted that the proportion of feed in the total cost of production from Sriboonchitta et al. (2000) is at 47.5% which is similar to that reported by ADB/NACA (1998) (in Ling et. al. 1999). And the profit per kg. shown by Sriboonchitta et al. (2000a) is 2.42 dollars, calculated at the exchange rate of 40 baht a dollar almost the same as that found by ADB/NACA (1998) ( Ling et al., 1999).

32 Table 31 Cost Structure per Kilogram of Asian Intensive Shrimp Farms by Country Thailand Indonesia Philippines Malaysia India Sri Lanka China Taiwan Total farm population , Usable sample size Percent of total population 68.7% 1.6% 2.2% 11.1% 10.3% 20.7% 4.4% 11.1% Average farm size (ha) Stocking density (PL/m 2 ) Feed conversion ratio Number of crop/year Production (kg./ha/year) 10,727 4,392 3,057 6,256 5,048 7,178 1,229 2,808 Thailand Indonesia Philippines Malaysia India Sri Lanka China Taiwan $ / kg % $ / kg % $ / kg % $ / kg % $ / kg % $ / kg % $ / kg % $ / kg % Fixed costs Overhead Depreciation Interest Variable costs Feed Seed Power Labor Other Total cost Farm-gate price Profit (US$/kg) Source: ADB/NACA, 1996 (in Ling et al., 1999) Note: Overhead includes the general overhead and costs of vehicle operation, maintenance, farm/pond rent, license, insurance and land and taxes.