The cherry blossom season in Spring initiated outdoor eating and business improved in the catering trade during April-May.

The cherry blossom season in Spring initiated outdoor eating and business improved in the catering trade during April-May. However, as price control is exercised carefully to avoid consumer backlash, the catering and retail trade has moved to make cheaper products available to end consumers.
Subsequently, demand for large sized shrimp did not improve much during the Golden Week festival compared with previous years. The festival demand for extra–large sizes (6/8 through 13/15) was disappointing for the catering trade.
Imports during the first quarter of the year fell behind last year’s. Shrimp prices in wholesale trading, however, were stable during this period

Market trends

The H1N1 flu alarm has created mixed trends in the market. In reaction to to the health scare, people are avoiding going out, which is hurting the already soft restaurant trade. Supermarkets, on the other hand, report increasing sales of frozen food including processed and prepared shrimp as more meals are prepared or eaten at home. Use of cooked and peeled shrimp has increased in pizza outlets.

As a result of shrinking business in the catering trade, imports of sushi shrimp are likely to be lower this year. Lower tourist numbers in the summer holiday this year are also likely to have a negative impact on the catering trade.

In a seasonally dull market in the hot and humid summer, trading is sporadic for small lots and selected sizes at wholesale/distribution level. Prices have weakened further for 16/20 counts b/tiger shrimp, for which demand is extremely poor and local stocks are high. This downward price movement also affected prices for the mid- range counts (21/25 and below). Supply shortage from the Kolkata area may reverse the situation. Supermarket demand for frozen vannamei is better; prices are under pressure as harvests have improved in southeast Asian countries.

Processed shrimp: Household demand has improved for frozen cooked and prepared shrimp. Use of pud/p&d and PTO has also increased by food delivery services, with vannamei shrimp selling better because of the price factor. However, demand for sushi shrimp (vannamei) from the Kaiten sushi chains has been seriously affected by the slowing restaurant trade.

Import/Export Trade: Lack of real demand by the market has weakened prices of 16/20 counts headless shell-on black tiger shrimp. Japanese buyers’ demand is greater for sizes 21/25 and below, for which prices are stable as supplies of these sizes are still limited in producing countries. By late May the price of Viet Nam origin 16/20 fell by USD 0.3-0.5/kg, as shipments contained more of the large sizes of shrimp. However, supplies of the preferred mid-sizes have improved from this source. At the same time, imports from Kolkata (India) packers have been affected because of the damage following the cyclone in late May.

Supply

Myanmar

The black tiger shrimp harvest in Myanmar is forecast to be lower than last year. The farming season started in April/May but there is very little interest among the farmers practicing semi-extensive aquaculture as Japan, the leading market, remains unattractive to them. Subsequently black tiger shrimp hatcheries are inactive and many farmers have shifted to soft-shell crab aquaculture. Only extensive farms practicing ‘catch and hold’ operations are expected to produce farmed black tiger shrimp this year.

India

As of 1 April 2009, the Government of India introduced a new ruling that allows only antibiotic-free certified farmed shrimp to be processed for export markets. The authorized laboratories of the Marine Products Export Development Authority of India (MPEDA) will be responsible for checking and certifying shrimp according to the required standards. Meanwhile, in the southwestern shrimp farming belt, many farms that produce black tiger shrimp, are becoming fully integrated, from hatchery to feed mill to grow out, to guarantee antibiotic-free harvests.

To meet the requirements of Japanese importers, farmers in West Bengal (Kolkata) have started to produce more medium counts (21/25 counts and below) of black tiger shrimp. In late May, farming in this area was seriously damaged by the cyclone Aila. High tidal waves caused damage to 50-60% of the farms and infrastructure and washed away crops that were ready for the peak farming season. In southern India, raw material supplies are still lower than expected.

Bangladesh

Black tiger shrimp farms in Khulna/Shatkhira area in Bangladesh have also been seriously damaged by the cyclone Aila.

Viet Nam

Discouraged by the falling prices of shrimp in the export markets, black tiger shrimp production has been scaled down in the southern provinces of Viet Nam. At the end March, nearly 8% of the farming area in the country had not prepared for the new season. The most affected provinces are Ca Mau and Bac Lieu where many processing plants have been forced to reduce their production by 35-40%. Harvests of black tiger shrimp from these areas mainly consist of large sized shrimp, for which consumer demand in Japan is very weak.

On the contrary, there is a surge in farming vannamei shrimp in the southern provinces. This year vannamei production may reach 100 000 tonnes in Viet Nam.

Thailand

Overall production of farmed shrimp dropped 15% during January-March 2009 compared with the same period last year; According to the country’s Shrimp Farmers Association, this year’s production may come down to 392 000 tonnes compared with 490 000 tonnes harvested last year. The production cut will be larger for vannamei compared with black tiger shrimp.

Indonesia

The disease problem that occurred in some vannamei farming areas is reportedly under control. Some government sources indicate that overall production may increase by some 20-30% this year. However, with further strengthening of Indonesian Rupiah against the US dollar, current prices in the export market are not high enough to cover production costs. Last year 300 000 tonnes of farmed shrimp were harvested in Indonesia.

Imports

Compared with last year, cumulative imports of shrimp during January-March 2009 increased by 3% to 566 396 tonnes against the same period last year. In the coming months, supplies for semi-processed and processed vannamei from Thailand are expected to increase compared with shell-on products. As for black tiger shrimp, market demand for 21/25 and smaller counts is likely to persist in coming months

Outlook

In the international arena, import volume and prices will be largely influenced by the economic situation in the country. Price and convenience will continue to be the key factors affecting consumer demand for the rest of the year in Japan. Consumer spending in Japan has declined to an extent not witnessed in recent history. However, the increase in home meal preparation is expected to improve household demand for shrimp; semi-processed and processed shrimp will benefit more from this development.

Requisitions from restaurants will be lower than last year as a result of the downward trends in business. The scheduled marketing plan for the coming summer holiday may also be affected, particularly if the H1N1 flu scare is prolonged.

Author: Fatima Ferdouse