GLOBEFISH - Information and Analysis on World Fish Trade

Shrimp - April 2014

01/04/2014

Market trend: 2014 market indicators show sluggish demand but low inventories in the traditional markets of Japan, the USA and Europe. There is strong demand in East Asia in celebration of the Lunar New Year.

The low production season continues in Asia keeping shrimp prices high and stable along the supply chain. During mid-January 2014, the export price of Vietnamese black tiger shrimp was high at USD 19 per kg for headless shell-on 16/20 count products. Interestingly, Vietnamese re-processors imported the same sized Indian vannamei shrimp at USD 17.80 per kg.

Japan

Post New Year demand for shrimp remains low, but firm price trend in the wholesale and import trade continues

Backed by the annual bonus season in December, consumption improved in Japan at the end of 2013 though overall demand for the year was low.  High shrimp prices coupled with the weak yen curbed imports of raw frozen shrimp and severely restricted supermarkets’ promotional sales in 2013. In the absence of cheaper vannamei shrimp, Japanese supermarkets promoted Argentinean seabob shrimp during the year-end high consumption season, although import and wholesale prices of seabob increased 30-40% compared with 2012.

During the first three quarters of 2013, the cumulative import volume of shrimp declined by 3.7% but the value in yen increased by 5.5%, compared with the same time period in 2012. Frozen shrimp supplies were at a record low for January–September 2013, moving 3.6% below the volume for the same time period in 2012. However, the share of value added shrimp in total imports increased from 28% to 29% due to better demand for cooked-frozen shrimp and sushi shrimp with rice. Thailand remained the top supplier, with 65% of shrimp from this source consisting of value-added products.

Viet Nam was the second largest importer to Japan, with 63% of their supplies consisting of raw frozen shrimp, shell-on and peeled varieties. China was the top supplier of ready-to-eat sushi shrimp with rice.

Cost of dining out in Japan increased by 8% from September 2013 to January 2014, and this increase was even higher for sushi products, with an increase of 17%. The catering sector is now adjusting their menu prices in order to accommodate the consumer budget against the rising seafood prices. Due to the exorbitant cost of shrimp, some popular high-end kaiten-sushi restaurants have reduced the number of shrimp items in their menu.

The Japanese market had trouble meeting their vannamei shrimp needs due to the production shortfalls in Thailand. Comparing the first three quarters of 2013 with 2012, combined frozen shrimp supplies from Viet Nam, Indonesia and India increased by 7 900 tonnes, however the decline from Thailand alone was 12 600 tonnes.

USA

In general, January 2014 shrimp sales remain low in the retail and restaurant trade. The situation is even more pronounced this year due to the extreme cold weather conditions in more than one third of the USA. This means restricted and reduced travel outside the home, which usually translates into lower sales. However, wholesale prices are still high due to the seasonal low supply from Asia.

Shrimp imports for the first three quarters of 2013 were less than imports during the same time period in 2012, despite increased supplies from India, Indonesia and Viet Nam. India is currently the number one shrimp exporter to the US market, with interest in Indian products evident at the Indian seafood show held in January 2014. However, India’s high import prices make purchases difficult for US buyers since these prices are higher, close to or just slightly above the sales pricing in the US market, which is already facing limited demand. Indian packers are also holding large future orders placed earlier by US buyers, while raw material supplies will be low until April.

The price rise for black tiger shrimp is very significant due to the acute supply shortage in India as well as from other sources in South and Southeast Asia, while demand continues to be strong for this species. Total global supply of black tigers has been much lower in January–September 2013 than the same time period in 2012.

US domestic supply

From January to November 2013, the cumulative landings were 1.4% lower than the same period in 2012, a total of 49 205 tonnes, the lowest in the last 3 years. The average ex-vessel price was 40% higher at USD 5.30 per lb when compared with the November 2012 average ex-vessel price.

During the January–September 2013 period, shrimp imports were 20 000 tonnes (-5.1%) below the corresponding period in 2012. India increased its shrimp exports to the USA by a 61% rise to 67 000 tonnes, and since July, was the top supplier to the US market. Ecuador was the second in ranking but exported less to the USA and more to the strong Asian markets. The USA also reported higher imports from Indonesia and Viet Nam, though these were not sufficient to offset large supply deficits from Thailand, Mexico and Malaysia.

Imports for January–September 2013 of shell-on and peeled shrimp, the two major categories, fell below 2012 volumes. The decline was significant for the former (-8% or 12 800 tonnes), but was marginal for the latter (-1%). Individual shares of these two product groups in total imports were 39.4% each.

Europe

Skyrocketing warm water shrimp prices have prompted some buyers to look for alternative sources such as the cold water varieties. However, landings of cold water shrimp in Europe were lower, particularly from the Northern Sea where catches have been declining for the past few years. Recently, European buyers have placed orders for warm water shrimp with Indian packers, but supplies were very limited and were mostly taken by Asian buyers.

The shrinking market in Europe is well mirrored in lower imports in 2013. For the first nine months of 2013, total shrimp imports into the EU-27 declined by 6.1% compared with the same time period in 2012, with shipments from third countries (non-EU countries) dropping by 6.4% in the period. Supplies dropped sharply from Ecuador (-11%), Thailand (-40%) and Canada (-15.%); while shipments from India and Argentina increased by 14% and 15% respectively. During the last quarter of 2013, demand from Europe for head-on vannamei shrimp was strong with major supermarket chains aggressively buyinging vannamei shrimp in preparation for year end sales. Demand for Argentinean red shrimp was also significant during the holiday season, which was supported by stable and competitive prices as well as good supplies.

From January–September 2013, Argentina supplied more shrimp to Spain (+10%) and Italy (+19%) compared with those same months in 2012. Overall imports into Spain, however, were lower (-7%) as a result of less supplies from Ecuador (-23%) and China (-4%). The Italian market was more or less stagnant and higher supplies from Argentina, Spain and Denmark were able to offset lower shipments from Ecuador.

During the first three quarters of 2013, India shipped more shrimp to the major European markets compared with the same time period in 2012, particularly to the UK (+19%), France (+11%) and Belgium (+23%), thanks to a bounty harvest in 2013. France also imported more from Ecuador offsetting lower supplies from Thailand and Madagascar.

In the January–September 2013 period, the UK market bought more coldwater shrimp from Denmark as a substitute for expensive warm water shrimp. Imports from Thailand, the number one supplier, dropped by almost 27% during the first nine month of 2013 compared to the same time period in 2012. Due to low catches and high prices, there were less imports of cold water shrimp from Norway.

Denmark took advantage of the global shortage of warm water shrimp, increasing its export to China, Italy and Sweden significantly.

In Germany, the current global market has negatively affected shrimp imports, with volumes dropping by more than 14% in January–September 2013 when compared with the same months in 2012,  Supplies from Thailand, Bangladesh and Viet Nam decline by 27%, 12% and 20% respectively.

High shrimp prices have also affected trading activities into and from the Netherlands and Belgium, with both countries posting negative growths as a result.

Asian markets have been very active as demand for shrimp is picking up with the Lunar New Year Celebration period, when shrimp consumption is high in Southeast and Far East Asian countries.

China and Viet Nam have been aggressively buying vannamei from India. Exports from Viet Nam and Myanmar to China through border trade have intensified. Recently, Chinese authorities lifted the ban on live black tiger shrimp imports from Viet Nam, which was imposed in October 2012. Vietnamese traders estimated that some 300 tonnes of shrimp, mainly live and fresh, go across the border to China every day as buyers from China pay higher prices than the local export processors.

Meanwhile, frozen shrimp imports into China significantly increased (+27%) during the first nine months of 2013 compared with the first nine of 2012, with more supplies coming from India (+194%), Greenland (+59%), Ecuador (+42%) and Canada (+6%). Imports from Thailand dropped by 7% during the period under review.

During January–August 2013, Vietnamese shrimp imports for export processing doubled from Ecuador (>20 000 tonnes) and India (>10 000 tonnes). An Industry source in Viet Nam  reported that  the country’s export revenue from vannamei shrimp increased by 80%  during the first nine months of  2013 compared with the same time period in 2012. The export revenue increase for black tiger shrimp exports was relatively marginal in comparison, at 2.1% for the first three quarters of 2013 compared with that time period in 2012. 

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