OCEAN FREIGHT
The freight rate is still strong and it very difficult to get any space confirmation. Some liners do not offer the service to some ports like Chicago, Houston, San Francisco or Jacksonville. There is only available freight service to main port only. The quoted price to LA is somewhere between 13,000-21,000 USD and around 13,000 – 18,000 USD to NY. However, very difficult to get the space for this price. Exporters need to pay a big premium for the space. Some are paying USD 25,000 and higher to get guaranteed space. The service is only for CY mode. The competition for vessel space among the exporters is very tough since demand is going up for festive season shipment. And also congestion at the destination like LA is making the price goes up. The latest information we had is there are more than 50 ships are piling up at the California gateways of Los Angeles and Long Beach. The situation might slightly relieve when all the shipment for Christmas and New Year has finished but the price will not go down to the last year level. I believe the new standard price is going to be set up in some point. And all exporters need to reconsider their cost structure. In our view, the price will hang in this level until summer 2022.
RAW MATERIAL / FARMS & HARVEST
The price of shrimp raw material all size range has moved up. The small size like HOSO 100 pcs/kg (CPTO 71/90) has significantly moved up from last week. I think the price for this size should go up in the next period of time because most of the suppliers are willing to finish their load for CPTO 71/90 – however it depends on freight situation as well. I have heard that some suppliers are now slow their production because of their cold storage is getting full. If the suppliers cannot ship the container out, they might not able to produce more. The other shrimp size that the price significantly moved up is HOSO 70 pcs/kg. One reason should be supply of the big size is slow down. As Thailand is being hit by several monsoon storms in the past few weeks and expect to have another 2-3 more to come. The shrimp farmer would not risk their crop to get damaged by heavy rain, they have to catch the shrimps they have to prevent the loss. White feces is still a problem for the shrimp farmer. Some part of Thailand is already affected by flood and heavy rain. We have been warned by the authority that there is a high chance of flooding all area in Thailand. We will see better view in the next few days how bad it could be. Someone said, it could be as bad as 2011.
COVID-19 IMPACT
The official number of Covid infected is now around 10,000 cases a day. So all the Covid measurement slightly relieve. The number of places are resume to open normally by Oct 1st such as cinema, fitness, park. If the number of vaccinated people significantly increases and the government, feel the situation is under control. The full open town (some provinces such as Bangkok, Chiangmai,) is being considered by the government. The date likely to be Nov 1st . However the full measurement is still being applied at the seafood factory to prevent the cluster. All the seafood factory are still reduce their capacity by reducing worker density, apply “bubble and sealed policy” – which means all workers can travel only their house (or dedicated resident) and factory and also still not allow any guests visit. There is no report of new cluster in any seafood factory for a while but all the factory do not want to take any risk of closing the production line.
