Europe's shrimp demand to remain low for the first half of 2016 : November 23, 2015
Lola Navarro – INTRAFISH
The strong US dollar is getting in the way of European buyers looking for bargains on product.
With high shrimp harvest season drawing to a close in most major countries, European demand is not showing signs of recovery, producers and traders told IntraFish, and all indications are that markets will remain flat for at least another eight months.
The main reason for the low volume is the the dollar-euro exchange rate, and even the upcoming Christmas season doesn’t seem to be a motivation for European buyers to get the product.
“During the first half of the year, buying markets were very much hesitating to buy raw material, because of the decline in Europe’s currency,” Heiko Lenk, managing director at Lenk Frozen Foods told IntraFish.
“Due to constantly falling raw material prices it is very difficult to build up any stocks without loses, people and wholesalers are buying hand to mouth, so there is no aggressive speed toward the Christmas season.”
Some producers point at European retail and foodservice buyers as culprits for the lackluster market.
“I am actually sick of their [European buyers’] behavior,” Adriaan de Leew, managing director at Belgian shrimp importer and exporter Solea International, told IntraFish.
While the company has demand in Europe, the overwhelming focus is on price — not quality.
“Buyers don’t understand the difficulties of shrimp farming, they are requesting pre-fixed prices for the crops to be harvested next summer, without even considering the challenges that may come along in the season,” he said.
“We are talking about shrimp, it is a delicacy; it is not chicken, and retailers treat the product as if it were chicken: there is always someone who is offering the product cheaper than somebody else.”
Europe is also, according to Leew, the most demanding market not only in terms of prices, but also in bureaucratic matters, and product presentation.
“I think people are not realizing how difficult it is to buy the right product, big retailers in Europe only care about prices, they say they care about sustainability but that is not the reality,” he said.
“They want to pay less than anyone else, get all documents in order, have the most sophisticated packaging, but when you try to get a contract with them, their first answer is always ‘too expensive’ without even looking at the product.”
The supply picture for Europe out of Asia is more complicated than in, say, the United States.
While Thailand has begun recovering from the devastation of Early Mortality Syndrome (EMS), bringing much-needed volumes to the global market, the country “is really going to be out of the game,” in Europe with the loss of the generalized system of preferences (GSP), Jim Gulkin, from Siam Canadian, told IntraFish.
Other countries, meanwhile, have eager markets in the US and Asia willing to pay higher premiums.
With the current exchange rates, and trends indicating the dollar may get stronger in the upcoming months, the European shrimp market may remain flat into next year, Gulkin said.
“The only thing that could bolster an increase in consumption would be a big drop in prices, and that will not happen at least for the first half of the year, and at that point, they could even increase,” said Gulkin.