Asian shrimp suppliers: Price crash makes for tough 2015 : April 22, 2015
Jeanine Stewart : Undercurrentnews
BRUSSELS, Belgium — Shrimp suppliers at the show told Undercurrent News the global price crash on shrimp this year makes for a difficult 2015.
“Prices have crashed the last couple months,” Nelson George, general manager for India-based Penver Products, told Undercurrent from his booth at Seafood Expo Global in Brussels, covered in full on our blog here. “This year’s not like last year — this year, things are quite difficult.”
“Things are going very badly for us,” another supplier of Asian shrimp told Undercurrent.
Prices are now on the low side historically, Siam Canadian managing director Jim Gulkin told Undercurrent, although he noted some countries such as India and Indonesia are getting a nice boost on product paid for in US dollars, thanks to the decline of their currency against the dollar.
Prices, on a dollar basis, are quite low, Gulkin said, quoting headless shell-on vannamei C&F price of $3.60/lb, which he said would fall on the low side for the last six years. Other specifications may be in better shape, but Gulkin said he’s not seeing any on the high side.
US buying of Asian shrimp has waned as buyers sit on inventories from last year, and Europe’s buying is soft due to its currency issues, causing suppliers to look for new markets.
“That’s why we have come here — we want to expand the market as well,” Pentar’s George said.
Thailand-based May Ao Foods Co. export sales and marketing executive Thatphon Kimthantamal told Undercurrent recovery from early mortality syndrome (EMS) will likely be slower than the government production figures indicate, and January and February were “very quiet” on US sales.
EMS recovery does mean increased volumes for producers in Thailand, and India’s production increase continues, sources said.
But for Penvar, this year’s sales volume increase is little consolation after taking into account the drop in margins, George said.
US buyers’ shift away from Asian suppliers, onto Latin America, may be another reason for waning demand; but Gulkin said this will not last.
“They can’t do that entirely,” he said. Latin America does not offer the further-processed products that Asian suppliers do, such as peeled and deveined shrimp, which the US market demands.
Gulkin said the market seems to be not far from the bottom, and others agreed.
As for US demand, “It’s starting to get better”, Kimhantamal said.
Gulkin noted that any production volume improvements that can be won in Thailand this year from the increasingly successful fight against early mortality syndrome are tempered by decreased densities, which the EMS fight has necessitated.
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