The shrimp supply chain
A simplified view of the supply chain in Thailand includes the following nodes:
1. Fry production
The supply chain begins with the fry, which refer to the shrimp larvae. In the past, the majority of fry supplied upstream to the aquaculture operators was collected from open coastal waters or from ponds. The detrimental environmental effects of fry collection have caused a shift from collection to production. In Thailand, fry production is largely concentrated in Chacehongsao, Chonburi and Phuket, where there are various large-scale and backyard hatcheries in operation. As opposed to traditional fry collection, fry production utilizes modern technology and can provide consistent fry yields.
2. Aquaculture
Once the fry has matured sufficiently – typically around 15-21 days – they are transported to aquaculture ponds where they grow for three to six months. While the ponds in Thailand vary in size and yield, the majority of them utilize intensive/ultra-intensive techniques. This means stocking more an approximate 10-50 shrimps per square meter with a high input ration in terms of fertilizer etc. The majority of aquaculture ponds are operated on relatively small land areas by directly by families or small businesses with only a few conglomerates operating in this node of the supply chain. Once the shrimp has fully matured in the aquaculture ponds, they are harvested and sold through local trade for further processing.
3. Local trade
In Thailand, local trade supply routes are relatively short. The vast majority of shrimp is sold at central markets, such as the Samut Sakhorn market, where farmers are connected to processors either directly through auctions or sometimes through traders.
Some farmers supply shrimp directly to processors and exporting companies, wholesalers and retail outlets while some employ local agents to broker these deals on their behalf.
4. Processing and export
The bulk of globally traded shrimp is exported in whole or with minor processing. However, as consumer demand has evolved in the main markets, i.e. the United States and the European Union, more and more processing is conducted prior to exporting to allow easy use of the frozen goods by consumers. This further processing refers to peeling, deheading, deveining and cutting, which are labour-intensive manual activities. In Thailand, shrimp is processed in large industrial scale processing plants, and in smaller outfits often called “peeling sheds”. In both, the labour-force consists of low-skilled to semi-skilled employees, many of whom are migrants.
Once peeled and otherwise processed, the shrimp is frozen and shipped to export market. During the past decades, Thailand has become the foremost shrimp-exporting country in the world. Thailand’s shrimp exporters are effectively organized through their mandatory participation and registration in the Thai Frozen Foods Association (TFFA) and only companies which are registered with TFFA have access to export markets. Typically exporters manage and arrange the transporting of the shrimp products on behalf of the importers.
5. Import, wholesale and retail
Importers are typically large conglomerates like the Chicken of the Sea of the Eastern Fish Company, which buy shrimp in vast quantities from Thai exporters. The shrimp is then redistributed by the wholesalers through four main channels as follows:
1. Distribution to food manufacturers who use the shrimp in producing various processed and frozen foods;
2. Distribution to retailers who sell the shrimp to consumers as branded or indiscriminate products;
3. Distribution to food service providers including restaurants;
4. Distribution through own brands directly to consumers and retailers;
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1. Fry production
The supply chain begins with the fry, which refer to the shrimp larvae. In the past, the majority of fry supplied upstream to the aquaculture operators was collected from open coastal waters or from ponds. The detrimental environmental effects of fry collection have caused a shift from collection to production. In Thailand, fry production is largely concentrated in Chacehongsao, Chonburi and Phuket, where there are various large-scale and backyard hatcheries in operation. As opposed to traditional fry collection, fry production utilizes modern technology and can provide consistent fry yields.
2. Aquaculture
Once the fry has matured sufficiently – typically around 15-21 days – they are transported to aquaculture ponds where they grow for three to six months. While the ponds in Thailand vary in size and yield, the majority of them utilize intensive/ultra-intensive techniques. This means stocking more an approximate 10-50 shrimps per square meter with a high input ration in terms of fertilizer etc. The majority of aquaculture ponds are operated on relatively small land areas by directly by families or small businesses with only a few conglomerates operating in this node of the supply chain. Once the shrimp has fully matured in the aquaculture ponds, they are harvested and sold through local trade for further processing.
3. Local trade
In Thailand, local trade supply routes are relatively short. The vast majority of shrimp is sold at central markets, such as the Samut Sakhorn market, where farmers are connected to processors either directly through auctions or sometimes through traders.
Some farmers supply shrimp directly to processors and exporting companies, wholesalers and retail outlets while some employ local agents to broker these deals on their behalf.
4. Processing and export
The bulk of globally traded shrimp is exported in whole or with minor processing. However, as consumer demand has evolved in the main markets, i.e. the United States and the European Union, more and more processing is conducted prior to exporting to allow easy use of the frozen goods by consumers. This further processing refers to peeling, deheading, deveining and cutting, which are labour-intensive manual activities. In Thailand, shrimp is processed in large industrial scale processing plants, and in smaller outfits often called “peeling sheds”. In both, the labour-force consists of low-skilled to semi-skilled employees, many of whom are migrants.
Once peeled and otherwise processed, the shrimp is frozen and shipped to export market. During the past decades, Thailand has become the foremost shrimp-exporting country in the world. Thailand’s shrimp exporters are effectively organized through their mandatory participation and registration in the Thai Frozen Foods Association (TFFA) and only companies which are registered with TFFA have access to export markets. Typically exporters manage and arrange the transporting of the shrimp products on behalf of the importers.
5. Import, wholesale and retail
Importers are typically large conglomerates like the Chicken of the Sea of the Eastern Fish Company, which buy shrimp in vast quantities from Thai exporters. The shrimp is then redistributed by the wholesalers through four main channels as follows:
1. Distribution to food manufacturers who use the shrimp in producing various processed and frozen foods;
2. Distribution to retailers who sell the shrimp to consumers as branded or indiscriminate products;
3. Distribution to food service providers including restaurants;
4. Distribution through own brands directly to consumers and retailers;
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