June 26, 2018 09:04 BST
BANGKOK, Thailand — Thai agribusiness giant Charoen Pokphand Foods (CP Foods) is growing its vannamei shrimp to much larger sizes, thanks to production improvements made during the industry’s struggle with early mortality syndrome (EMS).
CP Foods, which is a stock-listed arm of $45 billion-turnover conglomerate CP Group, is also eyeing a return to the farming of black tiger shrimp, or penaeus monodon, said Sujint Thammasart, chief operating officer for aquaculture with the company, in an interview with Undercurrent News in the company’s Bangkok headquarters.
The rationale for the focus on larger shrimp is China, Thammasart told Undercurrent. “Definitely, China will be the main shrimp market for Thailand.”
Amid a tough time for the Thai shrimp sector, where a minimum price has been put in place for farmers from processors, the country must look to differentiate, said Thammasart.
Thailand’s industry has to grow big sizes and continue with its strong food safety procedures, to meet Chinese demand, he said.
Then, the company’s three seafood processing plants in Thailand are now geared toward supplying large-sized vannamei to China, in raw and cooked, head-on formats, said Somchai Triamchaipisut, another senior CP Foods exec, during the recent Thaifex – World of Food Asia show.
“Thailand will meet every standard with the big sizes around the world. We have to go this way. If we grow the small sizes, we cannot compete with our neighbors, we cannot compete with India and Vietnam. Then, the market that can afford the big sizes is China,” said Thammasart.
“China is food safety crazy. They will come to Thailand to buy milk [for babies], for example,” he said. In 2008, there was a scandal in China where milk and infant formula, along with other food materials and components, had been adulterated with melamine. Of an estimated 300,000 victims in China, six babies died from kidney stones and other kidney damages and an estimated 54,000 babies were hospitalized. This is often cited as one of the main drivers of the obsession with the Chinese middle class for imported products.
“If you have a good story on the food safety, then you can sell to China. They have a lot of money, but they don’t have the product to buy,” he said.
Due to increasing Chinese government control of the environment, expanding its own shrimp production is not as easy as once it was, he told Undercurrent. Then, CP Foods is able to supply the large sizes China wants, also.
According to Thammasart, CP Foods’ average harvest size on vannamei now is around double what it used to be. “In the past, it was 10-15g [per shrimp]. Now it’s 25-30g, it’s much bigger. In the past, if you wanted a bigger animal, you have to grow black tiger. It’s easier to grow bigger sizes with vannamei now, but the taste is not as good as black tiger.”
So, to fill a niche in the market for black tiger that has opened up with India and Vietnam switching more and more to vannamei, Thammasart is planning to farm the former again.
“The animal in our pipeline is the [penaeus] monodon. I see the trend that this will grow. I have seen the market demand increase. Vietnam and India have changed a lot to vannamei, they used to be good suppliers of black tiger,” he said.
CP Foods has a strong black tiger-breeding program in place. “We have our black tiger genetics, our broodstock, we were growing them for 15 years and we keep improving [them]. At this moment, we are ready for production. We sell some to China, Malaysia, and now they test our quality and broodstock,” he said.
Formerly, black tiger broodstock was wild. “In the past, black tiger had no good genetics, no good breeding, we could get strong farmed broodstock. We had to get it from the sea. Now, our broodstock is in the pond. We have much lower risk than the past,” said Thammasart. “It’s much easier for the farmers to follow this path.”
This results in a much more predictable animal to farm. “You used to harvest ten pieces, you can only use two pieces; the other eight would have whitespot.”
CP Foods is currently only doing demonstration farming of black tiger. “But, I have a plan to expand this. When you develop the genetics, you also have to develop the feed and the culture method for them.”
It’s worth the effort, he feels. “It’s more difficult to grow, but you get a better price,” Thammasart told Undercurrent.
A silver lining from EMS cloud
Thammasart was integral in coming up with the new production methods in Thailand that have seen the country conquer its issues with early mortality syndrome.
Prior to EMS, Thailand was producing over 600,000 metric tons of shrimp. However, this then dived to below 200,000t from 2012-2015.
“During the three-to-four years of struggling, we came up with the “three clean system”. That’s “pond clean, water clean, animal clean”,” Thammasart said.
Then, CP Foods also invested in creating a new breed of shrimp that is resistant to the disease.
“By having a good shrimp breeding program, we can grow to the bigger sizes. This is a special market, you do not compete so much with others,” he said.
“By improving the genetics we have got the animal more resistant to EMS. Then, they grow faster. Thai farmers can grow bigger. In the past, you would never see vannamei at 30g. Now, we grow to 40g, 50g,” he said.
“Thai farmers are able to grow bigger than other countries. We have the advantage of the size and fast growth, to compete with them. But, it takes time to convince our farmers, you go to this direction, you have fewer competitors,” Thammasart said.
“We need some money and some time to convert our ponds and our facilities to be suitable for that system. The cost might be more, but we have to grow to the bigger sizes. I believe Thailand will produce the biggest size in the world, with a constant supply,” he said.
Another technological development planned by CP Foods is to promote “controlled” farming.
“As a company, I think the direction we will move will be the controlled method. We will maybe culture indoors; it might be a lot of investment, but we believe this is the way to make production sustainable. But, we have to make this economically viable,” he said.
The company already has two undercover farms in Thailand. They are not 100% recirculating aquaculture systems (RAS). However, RAS could be something the company looks at in the future.
“It’s not 100% recycled water, but nearly. We will go in this direction and prove it first. Then, we will show it makes money,” he said. “Unless we spend money, we won’t be able to control production and it’s not good for the future. It takes time but we have to go that way.”
Tough times in Thailand
During the recent Thaifex show, the low prices for farmers and lack of orders for processors were major topics of discussion. Although prices have started to firm up, they are still very low, historically.
This has sources feeling production in Thailand, which was forecasted to grow, could either stay around 300,000t or even drop.
“Production could go down around 10%. The most important thing is the price, as the low prices have made farmers hesitate on a new crop, due to the price pressure on them,” Thammasart said.
This situation had some sources at Thaifex saying the current climate is even worse than in the EMS period.
Thammasart does not agree, however.
“My view is that, if we can produce and can sell, the losses must be much less than if we cannot produce. At that [EMS] time, the losses were huge. Even with low prices, we can produce. You make a loss, but not very big, you can adjust for that. But, if you cannot produce or they grow to half its size and then die, it’s a big loss,” he said.