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GLOBEFISH - Analysis and information on world fish trade

Lower prices helped shrimp consumption in USA

06/06/2016

With a 3.2% rise in imports destined for local consumption, the USA was the largest market for imported shrimp in 2015. Lower shrimp prices helped producing countries increase exports beyond only traditional markets. Indeed, Ecuador, India and others exported large quantities of shrimp to Viet Nam and China as well as to other markets in Asia and the Middle East.

SUPPLY

Industry estimates indicate that the global 2015 farmed shrimp production totalled 2 million tonnes with lower production in China, India, Ecuador, Indonesia and Viet Nam compared with 2014. Farmers used conservative approaches in pond stocking as a result of falling market prices through the third quarter of 2015.

In China, the largest producing country, disease occurrence was reported, impacting supplies. In India, heavy rainfalls and floods significantly affected production in the last two months of 2015 in Andhra Pradesh, the main farming region of the country. As a result, the overall growth rate in India for 2015 is estimated be 10-15% compared with 22% growth in 2014. During the 2014-15 fiscal year (April-March), Indian farmers produced 433 448 tonnes, of which 82% was vannamei shrimp. This makes India the second largest producer of farmed shrimp after China. In Thailand, the farming situation has improved in 2015 with production estimated to be between 240 000-250 000 tonnes, still far below the record levels recorded some years ago. Within Latin America, Ecuador remained the largest producer of farmed shrimp in 2015, at 320 000 tonnes.

IMPORT /EXPORT TRENDS

Imports

In 2015, there were mixed trends in global shrimp trade. Compared with 2014, imports declined in most of the developed markets, except in the USA, despite overall price weakening.

EU shrimp imports from extra-EU countries declined by 3.5% to total 563 000 tonnes in 2015, whereas US imports increased by 3.2% to reach 587 500 tonnes during the same period. Imports in Japan fell by 4.2% to total 213 700 tonnes. This data confirms the USA as the dominating market in international shrimp trade, and shows that US buyers continue to influence global market prices.

Lower shrimp prices also directed more exports to East Asian markets. Compared with 2014, imports increased in Viet Nam, Republic of Korea, China, Thailand and Taiwan Province of China. Viet Nam is now the fourth largest import market for shrimp, buying more than 200 000 tonnes of shrimp in 2015, mainly going to the processing industry for re-export.

Exports:

In export trade, India was the lead supply source exporting 383 000 tonnes in 2015. Exports from these two countries increased by 11% and 15% respectively compared with 2014. Notably, Viet Nam was the number one import market for Ecuadorian shrimp and the second for Indian shrimp in 2015.

Falling production of farmed shrimp in China also resulted in reduced Chinese exports and increased imports as domestic market prices were more attractive to farmers. Official trade data indicated a 31% rise in shrimp imports to China at 102 846 tonnes in 2015 compared with 2014. This figure however, excludes most of the border trade with Viet Nam.

Excluding China, Viet Nam’s shrimp exports were directed to 15 leading markets to total shipments of 230 000 tonnes. Considering this amount along with significant re-exports to China through border trade, total shrimp exports from Viet Nam most likely exceeds 300 000 tonnes. Following the trend in 2013 and 2014, strong imports of raw frozen shrimp continued in Viet Nam during 2015 to total 216 370 tonnes from 11 countries. Among the top three sources, supplies increased by 61% from Ecuador, 17% from India and 235% from Iran. Supplies also increased significantly from Thailand to Viet Nam for reprocessing and also from Mexico compared with 2014. For Ecuador and Iran, Viet Nam was the top export market for shrimp.

Thailand, which traditionally has exports dominated by value-added products, finally recovered its exports by 2.8%, with increased supplies to the USA mostly making up this increase. Thai supplies to Japan and the EU markets, however, declined compared with 2014.

JAPAN

Consumer demand for shrimp remained price sensitive and seasonal in Japan. Import demand for raw shrimp has been on a long-term decline trend and imports in 2015 were confirming this trend at a record low of 213 700 tonnes. Demand for value-added shrimp however increased compared with 2014.

The top five sources to Japan were Viet Nam, Thailand, Indonesia, India and China. Supplies increased marginally from Indonesia (+1.4%) and India (+1%) but declined from the others. Though not in the top five, it is interesting to note a 48% rise in imports from Ecuador to total 1 514 tonnes.

USA

2015 was a strong year for US shrimp imports due to a combination of a recovering economy, good weather in the summer months and growing shrimp consumption. The market remained attractive to most shrimp producing countries, even with the average export price in 2015 18-20% lower than the previous year. The USA was the top global import market for shrimp in 2015, with 587 507 tonnes imported, demonstrating 3.2% year-on-year growth. US importers paid nearly USD 1.25 billion less than in 2014 as the import value declined by 18.5% to total USD 5.46 billion in 2015. Imports of all types of raw and value-added shrimp increased compared with both 2013 and 2014.
The top five shrimp suppliers to the US market demonstrated varied trends in 2015; India (+25%), Indonesia (+11%), Ecuador (-7%) and Thailand (+14%) and Viet Nam (-17%). As a result of weak US import prices, exporters from Ecuador diverted more shrimp (head-on) to Japan and other East Asian markets.

Preliminary statistics show 2015 shrimp tail-off supplies in the US market at 591 000-614 000 tonnes. This total is the combination of imports as well as domestic landings from various US fisheries. The estimate is roughly 3% above 2014, and the second highest since the 1980's.

EU

In general, shrimp demand in the EU was dormant in 2015 resulting in a 3.5% fall in total imports for the EU at 562 000 tonnes, compared with 582 500 tonnes imported in 2014 from non-EU countries. Nearly 20% of this volume was comprised of prepared or value-added products. The share of tropical raw shrimp in extra-EU shrimp imports was 72%. The two largest markets, Spain and France, remained receptive to lower market prices and increased their imports by 4.3% and 2.8% respectively. Their combined market share totalled 48% of EU shrimp imports in 2015. Poland also imported more (+16%) at 8 249 tonnes compared with 2014. Other members of the EU imported less shrimp. Total EU imports increased from Ecuador, India, Argentina and Viet Nam in 2015.

With the trade embargo, import demand in Russia dropped significantly by 55% from 51 000 tonnes in 2014 to only 23 000 tonnes in 2015.

Asia and other markets

Shrimp imports increased in Asian markets for direct consumption in China, Republic of Korea, Taiwan Province of China, Sri Lanka and the Maldives and for re-exports in Viet Nam and Thailand.
In the Pacific, shrimp imports declined by 14% in Australia and 7% in New Zealand.
In South Asia, the hospitality industries in Sri Lanka and the Maldives imported more shrimp from India during the reporting period.

Outlook

Export earnings from shrimp declined in most of the producing countries in 2015 due to lower market prices. Many producers were able to increase sales in the non-traditional markets. For Ecuador, Asia has turned out to be an important market area despite the fact that Asia remains the largest shrimp producing region in the world.
2016 seems to have started with some stability in market prices, while imports in the USA increased by 6.5% during the first two months of 2016, indicating lower inventories in the market. Compared with 2015, consumer demand during Lent has been stronger in the USA, particularly within the catering trade. Meanwhile, US buyers are waiting for the seasonal supply to begin in Asia.
On the production side, pond stocking has been delayed in India due to weather conditions as well as some disease issues. Current harvests are lower than expected and raw material prices are high. Demand from Viet Nam is strong, also contributing to high raw material prices in India. Another factor is that the number of processing factories has increased and with last year’s flooding in parts of Andhra Pradesh, raw material supplies remain low.

Looking forward, the unusual hot weather in Southeast Asia may cause a slow production beginning for the season in April/May.

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