In 2012 the global production forecast for aquacultured shrimp is unlikely to meet the targets set in many countries. Oversupply of vannamei has pushed prices lower while market demand remained weak from January to October.

Supplies & Prices

As the end of the farming season approaches, harvests in most of the producing countries are likely to be below the targets set for 2012. In Viet Nam large farming areas have suffered from severe crop losses throughout the season, while the large production and volume of vannamei shrimp on offer from India has had a negative impact on shrimp prices. Production slowed down in Thailand and Indonesia by the third quarter and Indian farmers cut back vannamei production in September. China’s overall exports of shrimp declined by 16% during the first half of the year, and the Danish shrimp industry has seen its exports fall by almost 17%. Falling market prices have also affected Latin American production but to a lesser extent.

Markets

Throughout the year, weak international shrimp prices have not stimulated consumer demand in the two large markets of the USA and the European Union. In Japan, however, the trend has been slightly more positive.

Japan

In Japan, cumulative imports of all types of shrimp during the first eight months were nearly 172 000 tonnes. Imports of processed shrimp increased, taking a 28% share of total shrimp imports. Demand for salad shrimp and cooked shrimp has risen, although there are clear indications of waning consumer demand for raw shell-on shrimp in the Japanese market.  For frozen shrimp, the Tokyo Metropolitan City office reported a 17% (7 000 tonnes) overall increase in sales at the Tsukiji market during the January-August period compared with the same period last year. Improved supplies and affordable prices have also led to improved demand for Argentinean seabob shrimp (head-on) and encouraged supermarkets to run promotional campaigns for vannamei shrimp, favouring Thai and Malaysian vannamei.

USA

USA imports increased during the first half of the year because of speculative demand by importers, which have proved problematic for the rest of the year.  Despite some swing in supply and spot improvements in demand, the market has been characterized by quiet demand and abundant supply.

The large production of vannamei in India has had a significant influence on the whole complex of the US shrimp market. Supplies coming from the other Asian sources (Indonesia, Viet Nam and Thailand) are feeling these effects and Thai exporters in particular are losing their market share.

Taken overall, between late March and early October, the wholesale price of a number of shrimp products clearly showed a negative trend, with purchases also suffering as a result of the weakening of the US dollar.  Nevertheless, given the worsening economic situation in the Eurozone and the reported lower buying interest in raw frozen shrimp from Japan, the US remains the important market focus for many producing countries.

EU

Waning consumer interest has badly affected EU shrimp markets. Consumers have cut back spending as confidence was reported to be at a 40-month low in September this year, while sales declined in both the retail and catering sectors over the summer. The weakness of the euro against the US dollar also contributed to the depressed demand. During the first half of 2012 shrimp imports posted negative growth of almost 11% on a year on year basis. In Spain, the largest shrimp market in Europe, shrimp imports dropped by one fifth. This scenario has prompted European buyers to look for cheaper sources, such as black tiger shrimp from Bangladesh. Some buyers have also opted for cheaper vannamei, mainly from India, which has in turn put pressure on the black tiger price.

China

The decrease in China’s economic growth this year, forecast to be around 7.7%, the lowest since 1999, has slowed shrimp imports. Canada remained the largest supplier with its exports up by more than 41%, followed by Thailand (+ 44%).

Outlook

The traditional year-end demand is not apparent this year in Western markets, and is particularly absent from the EU market. In the US there more than enough inventory to cover the Christmas/New Year sales even with improved demand. In Japan, shrimp prices are lower than last year, which could support increased consumption during the coming months. Demand for Southeast Asian vannamei and black tiger shrimp should be strong in the Japanese market from now until March or April next year. For year-end sales, the other markets in Asia will also be important for local and regional suppliers. Wider market prices can be expected to hold and possibly improve by late December.