Bottom seen in US shrimp prices, but buyers remain cautious : April 29, 2015
Matt Whittaker, Tom Seaman – UNDERCURRENTNEWS
US shrimp distributors have mostly worked their way through excess holiday inventory and think prices have bottomed, but there hasn’t been a widespread return to buying as caution remains given recently volatile prices.
Buying has been quiet because overseas prices didn’t stop coming down until recently, an industry source told Undercurrent News last week, noting a firming or stabilization in Indonesian, Indian and Vietnamese prices.
Once prices from Indonesia started to firm up, people started sensing a bottom in the market, he said.
US wholesale prices for 41-50 count headless, shell-on vannamei from Indonesia hit a bottom of $4 earlier this year before bouncing and then resuming a downtrend, accordion to Undercurrent’s price portal. The latest data show they are at $4.05.
Prices from India have shown a similar trend, bouncing to $4.80 recently for 26-30 count from $4.70 earlier in the year.
But the inflection point has left some importers unsure of what to do, the source said.
Although he thinks prices will be going up, “there are still guys throwing stuff away here at very cheap prices.”
He recently heard of one vendor in California selling 16-20 count EZ-peel shrimp for $5 a pound wholesale while he’s been hearing of 10% higher prices elsewhere.
It still may be another roughly 40 days before purchasing becomes stronger as major buyers like restaurants and retailers wait to see what happens with Indian supply and whether Thailand will be a major contributor, he said.
Another industry source said the market has reached a tipping point in price on some sizes, with smaller sizes like 20-count and smaller stabilizing. Larger sizes have remained higher because there isn’t a lot of product around, he said.
But buyers remain cautious because of recent volatility in the market, he said.
His company last week was still buying hand-to-mouth, not having decided to jump in and take a position.
Now that Lent is over, “I don’t think you’re seeing a rush to fill up the freezers”, he said.
Rather than trying to time the market with one large purchase in June, buyers may continue to make purchases on an as-needed basis, another industry source told Undercurrent.
As Undercurrent has previously reported, Jim Gulkin, managing director of Bangkok, Thailand-based Siam Canadian Group, told Undercurrent that he expects US, Canada and EU purchasing to increase through May and June.
Importers and end users are to a large degree sitting on the fence awaiting to see what pricing is going to look like once Asian production is in full swing, he said.
“However, there are deficits starting to appear in inventories, and purchasing has already started to pick up, but the heavy buying won’t likely start until May or June,” said Gulkin.
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