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September 24, 2015

Thailand

Jim Gulkin Predicts Thai Production of 450,000 Metric Tons by 2018

 

Thai shrimp production looks to be on the road to recovery and could hit as much as 450,000 metric tons in next two to three years, said Jim Gulkin, founder and managing director of Siam Canadian Group.

 

After being hit by early mortality syndrome (EMS) in 2012, Thai shrimp production sank to around 200,000 tons in the last two years, from a peak of 640,000 tons.

 

Gulkin, who’s business is based in the Bangkok, Thailand, said,  “I think this process will take two to three years....  Thailand will continue to increase production until it finds its new comfort level, which I would venture would be somewhere between 400,000-450,000 metric tons.”

 

On China, Gulkin said the general consensus is that China’s production for 2015 will be somewhere between 25-40% below that of 2014, which was significantly lower than 2013.  He said, “China is heavily dependent on imports from India for further processing and imports from India, Ecuador and other countries for domestic consumption.  This will continue until China improves its own production.”  Chinese production will continue to be problematic next year, he said.  “There simply is not yet enough will or cohesiveness to heal the industry.”

 

Gulkin said Siam Canadian is looking to expand over the next five to seven years, hoping for $400 to $500 million in revenues.  The drivers of growth will be expansion of its customer base, increased sales in existing markets and further penetration into some of the newer markets, like Asia, Central and South America and Africa.

 

Siam Canadian focuses on six services: procurement, quality assurance, logistics management, new product development, printing and packaging inventory management.

 

Demand and prices for shrimp have been down, meaning Siam Canadian’s revenues will not exceed $320 million in 2015, said Gulkin.  There are several reasons for the lower demand.  One is the devaluation against the USA dollar by the Australian dollar, the Canadian dollar, the euro, the Mexican peso and the Russian ruble.  Another is “The rapid drop in shrimp prices resulted in many importers and end users holding higher priced, difficult-to-sell inventory, which has plugged up the system and slowed demand,” he said.

 

Also, weaker economies in Europe, Russia, Canada, Australia and other countries have impacted consumption, said Gulkin.  “Uncertainty or more accurately, concern that prices would drop further has made many buyers hesitant to commit...to larger orders.”

 

Demand has recently improved, however.  “We are seeing more orders being placed recently, particularly from the USA.  The UK has picked up to some degree.  Europe is still sluggish.  Australia is sluggish, Canada is slightly improved,” is how Gulkin summed up the market picture.

 

Source: Undercurrent News [eight free news reads every month].  Editor, Tom Seaman.  Siam Canadian’s Gulkin: Thai shrimp output could be 450,000t by 2018.  Tom Seaman  (undercurrent@undercurrentnews.com).  September 23, 2015.

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