Farmed shrimp prices increased worldwide, following forecast of delayed start of the season in SE Asia and lower supplies for the rest of the year.

This year’s forecast for the production of farmed shrimp is not very encouraging for Asia - the largest producing region. Harvests in Thailand are forecast to be 30% lower than in 2012 because of the effect of the early mortality syndrome (EMS). Viet Nam is struggling with the same problem as well as the ethoxyquin issue. Production in India could also be lower because of the conservative approach of farmers.

Shrimp prices increased worldwide in 2012 and imports slowed down in the conventional markets. The weakening of the yen has affected both domestic and import trade in Japan. Current import orders are also somewhat sporadic or limited from the USA and European markets, and supply is also forecast to be uncertain for the first half of the year.

Supply

Overall availability of aquacultured shrimp has remained low in Asia since late in 2012. Farmers in East Asia, from China to Malaysia, lost millions of dollars’ worth of crops affected by EMS. The problem surfaced in the eastern region of Thailand during late 2012 and has now spread to the southern aquaculture belt of the country. The severity of the problem means that there will be a
delay in the new season’s first harvest in Thailand, which some predict could be as late as June or July.

The poor harvest that started last year persists in Viet Nam; nearly 80% of shrimp farms in the Mekong Delta area were affected by EMS, but the lack of adequate bank loans is also a factor. For many months a shortage of raw material has been a serious problem for the export processing industry in Viet Nam. The ethoxyquin issue is also restricting exports to Japan.

Production of vannamei and black tiger shrimp in India could also be lower in the coming season. In the southern states farmers produce mainly vannamei shrimp. This year, many farmers have either not re-stocked their ponds or stocked them at a low level because of the limited availability of quality vannamei brood stock and fry. Disease problems are also reported in Andhra and Odisha. The Marine Product Export Development of India (MPEDA) introduced stringent guidelines for obtaining a Pre-harvest Test Certificate (PHTC) and this is another reason for limited farming efforts at the beginning of this season.

The white spot disease has also hit farm production in Latin America and wild shrimp landings have been disappointing along the Pacific coast.

Ex-farm prices are rising throughout Asia, pushing export prices up, although any real demand boost in the major markets is still not apparent.

Japan

The yen started to weaken against the US dollar in late 2012, and by February 2013 was down 20% against the US dollar. This has affected higher-end seafood imports, including shrimp, while domestic stocks of shrimp are low.

The situation has created a lot of uncertainty in the market just prior to the Spring festival, when shrimp consumption generally peaks. Wholesale prices of shellon shrimp have increased by 10-20% for vannamei shrimp and 10% for black tiger shrimp in the first two months of the year, although overall demand has been low during these two months. There was a 10% rise in coldwater shrimp import prices following lower catches in producing countries and the yen depreciation. The export price in Viet Nam for 16/20 counts headless shell-on shrimp increased to USD 12.50/kg CFR Japan. Offer prices from Thailand have increased influenced by the supply shortage, while imports from India are also subject to quarantine because of the ethoxyquin issue.

Importers, wholesalers and distributors are facing price resistance for intermediary and retail trade. Japanese supermarkets are also facing challenges while trying to launch promotional campaigns in anticipation of demand in April/May.

Imports in 2012

Supplies of raw frozen tropical shrimp and dried shrimp were lower in 2012. The 53% rise in imports from Argentina largely compensated for the supply shortage of shell-on products from Thailand, Viet Nam, India, China and elsewhere. On a positive note, imports of prepared/processed shrimp were higher, making up a 27% share of total shrimp imports. This trend falls in line with the Japanese government’s policy to promote “Fast Fish”.

There was a 6.5 % shortfall in imports of raw frozen shrimp during January compared with last year, although domestic stocks in Japan were low.

USA

The subject of imported shrimp and its possible negative effects on local US shrimpers has been a dominant issue in the first months of this year. Initially, claims were made by the Coalition of Gulf Shrimp Industries, not the shrimp fishermen, although subsequently the Southern Shrimp Alliance added its support to the investigation, that “the US shrimp industry has been materially injured or threatened with material injury due to the subsidized shrimp imports”. Seven countries are implicated namely, Thailand, India, China, Viet Nam, Malaysia, Ecuador and Indonesia. The complaint is that governments in these countries allegedly subsidize their industries by providing shrimp larvae, assisting farmers and processors among others. The products targeted are certain processed warmwater frozen shrimp products. The Department of Commerce and the US International Trade Commission decided on 18 January to initiate countervailing duty investigations with a time frame stretching to early June and into July before final decisions will be made known.

Some dissension has been reported within the US shrimp industry saying that farmed and wild shrimp target two different markets, and therefore should not be considered like products, and for that reason imported cultured shrimp would not cause injury to the domestic product.

Meanwhile, EMS in farmed shrimp in Thailand, Viet Nam and China is a matter of concern for the USA as those three countries account for about 40% of traditional supply to the US market. In Latin American countries, supply is under threat as well. While white spot disease continues to hit farm production hard, wild shrimp landings along the Pacific coast have been disappointing. In the case of Ecuador, the amount of exports to alternative markets in Europe and Asia for reprocessing is another factor that reduces the supply for US importers.

Both issues were dominant during negotiations at the recent Boston Seafood Show, as the possible imposition of countervailing tariffs would certainly have a major effect when negotiating shrimp prices for the rest of the year. According to analysts, this year has been slower with little incentive to make hasty commitments by buyers.

As a result of the supply situation and some rise in spot demand (Chinese New Year, Lent period, and others) the market for white farmed shrimp of Asian and Latin American origin has remained steady to firm, with supply shortage for shell-on products. For black tiger shrimp, larger sizes remain in short supply, which has strengthened the market; current prices are high. Wholesale prices have been rising along with increased export prices in producing countries. As a result of added replacement costs, wholesalers and traders prefer to wait for some more weeks before releasing their stocks.

Imports

In 2012, the market imported 534 686 tonnes of shrimp, valued at USD 4 500 million, which was lower by 7.3% in volume and 13.5% in value. This is the largest drop since 1995. While some countries increased their shipments (India, Ecuador and Indonesia) this was not enough to compensate for the sharp drop in Thai exports.

Europe

After being quiet for the past few months, recently European markets began to show signs of improvement. Asian packers have been receiving a good number of enquiries from European buyers since late February. However, this was mainly driven by the importers’ need to re-fill diminishing stocks instead of stimulating consumer demand. Deepening Euro-area recession and rising consumer prices coupled with the austerity measures in some countries have affected the EU shrimp market. Thus, product movement was still relatively slow during the first quarter of this year.

Shrimp imports into the EU-27 posted negative growth last year, down by 9% in volume over 2011 amounting to around 772 648 tonnes. Imports from third countries also declined by 8.7% with fewer shipments recorded from major suppliers such as Ecuador (-5.3%), Greenland (-10.4%), Argentina (-11.6%) and Thailand (-15.4%). Among the top ten suppliers to the EU only India and Canada managed to increase their supplies by 2.2% and 7.9% respectively last year.

Shrimp imports into the main EU markets of Spain and Italy suffered double digit drops last year, declining by -15.4% and -12.4% respectively. In these two markets, fewer shipments were reported from traditional suppliers such as Argentina and Ecuador as well as from Asian countries. Exports of Argentinean shrimp will be significantly affected by the EU’s new Generalized System of Preferences to be implemented from January 2014, which will impose a 12% import tariff instead of the current rate of 4.5%.

France imported more shrimp from Ecuador (+7.1%) and India (+4.7%) last year, which somewhat compensated for the significant drops in supplies from Thailand (-20.2%), Bangladesh (-16.1%), Viet Nam (-25.4%) and Madagascar (-3.9%). Meanwhile more shipments from Thailand (+2%) and Bangladesh (+24.3%) into Germany last year were unable to offset the reduced supplies from Viet Nam (-22.1%) and India (-4.3%). Thus, the overall shrimp imports into Germany were marginally down by 4.5%.

Thailand is now the largest supplier to Germany and also the UK market. Supplies from Thailand to the UK market last year increased by 5.6%. Therefore it is understandable that the Thai government is very much concerned about the recent negative reports in the UK press accusing the Thai shrimp industry of using trash fish from highly destructive fishing methods and being involved in human trafficking of its workers from neighbouring countries. Total shrimp imports into the UK declined by 5.2% last year, largely because fewer shipments came from Denmark (-12.2%), Viet Nam (-24.7%) and Bangladesh (-17.1%).

Bangladesh did well in the Netherlands and became the number one supplier to the market last year. The Netherlands, however, imported less shrimp (-15.6%) and its exports also sharply fell by 20%. Similar trends were noticed in Belgium where shrimp imports and exports into and from the country dropped by 18.1% and 17.9% respectively during the reporting period.

Imports of shrimp into Denmark, mainly for reprocessing, marginally declined (-3%) last year mainly because of lower supplies from Greenland (-10%) despite more shipments arriving from Canada (+36%) and the USA (+12.5%). More imports are expected from North America in the future as the EU has finally agreed to remove the 20% tariff imposed since early 1970’s for shrimp from the US West Coast.

Asia

Shrimp demand in Southeast and Far East Asian countries continues to grow both for domestic consumption and also for the reprocessing industry. Shrimp imports into Hong Kong SAR, Singapore, Taiwan Province of China and China in 2012 grew by 22.8%, 2.1%, 1.1% and 3.0% respectively in volume over the previous year. Canada remained the largest shrimp supplier to China followed by Thailand, Ecuador, Greenland and India. In an attempt to boost exports, the Canadian government is providing CAD 165 000 (USD 162 016) to the Canadian Association of Prawn Producers (CAPP) to promote its shrimp in China and Russia.

Malaysia is another important market for shrimp and imported around 41 300 tonnes last year, which was slightly lower (-1.7%) than in 2011. Shrimp imports into Thailand, which are mainly for reprocessing, fell by 13.4% during the reporting period. In contrast, imports of shrimp raw material into Viet Nam have been rising. The country doubled its shrimp imports from Thailand to around 10 500 tonnes last year from 5 200 tonnes recorded in 2011, while shrimp imports from India also increased by 13.2%
to 14 357 tonnes.

As a result of supply shortages ex-farm vannamei prices in Thailand increased to THB 164 – 168 (USD 5.5 – 5.6) for 60 pieces/kg and THB 155 – 160 (USD 5.2-5.4) for 70 pieces in March. In the Mekong Delta black tiger raw material prices also went up substantially and shrimp traders paid VND 240 000 (USD 11.5) a kilogram for size 20 and VND 160 000-170 000 (USD 7.7-8.1) a kilogram for size 30 pc/kg, which was the highest in the last year.

Finally, after being absent for many years, shrimp products from Pakistan will be available in EU markets this year. The EU has decided to allow two companies from Pakistan to export shrimp to the EU from 12 March after the ban imposed 6 years ago was lifted.