Farmed shrimp sector bracing for Trump impact : Apr 28, 2017
Neil Ramsden : Undercurrentnews
US President Donald Trump’s administration has not yet had any impact on the farmed shrimp sector, but the latter is bracing for legislation to affect trade “sooner or later”, said Jim Gulkin, CEO and founder of Siam Canadian Group.
Given the administration’s trade outlook, shrimp traders are expecting a move which will make it harder to sell into the US. Gulkin warned at the end of 2016 that Trump’s election could make for a tricky period of trade with the US.
“Most major US importers, retailers and other end users have yet to step in to book their 2017 programs,” he told Undercurrent News on the even of the Brussels seafood show. “The US economy is relatively strong, I expect consumption to be healthy this year.”
Minh Phu’s chairman, on the other hand, told Undercurrent the US and Japan had begun buying, anticipating great demand later in the year.
Siam Canadian is expecting at least a 15% lift in production out of Thailand this year, which seems to be improving, said Gulkin. The country produced around 300,000 metric tons in 2016.
Earlier in the year, Siam Canadian’s Thai office forecast that China and Japan would continue to buy from Thailand, and that this would impact Thai raw material prices, especially on small sizes.
Thai prices on small sizes may remain high throughout the year, only easing if the country finds it has to carry out unexpected early harvests, dropping large quantities of small shrimp onto the market in a short period, the company said.
“Vietnam also will have better production than 2016, but the figure is hard to estimate as yet,” he said. “India has increased farming areas this year but has a lot of production problems, particularly disease.”
“I think India production will be somewhere in the neighborhood of 5-10% above 2016.”
Indonesia, meanwhile, is continuing to face disease issues, Gulkin added. As in India, farming areas have increased, but this is being offset by disease problems.
“I expect Indonesia production to be similar to 2016, plus or minus 5%,” he said. “We also need to watch if there will be any impact from CP Prima’s financial woes.”
Chinese production seems to be improving, at least in some areas. “Overall I expect some improvement over 2016 production,” he said. “It’s hard to put a number on it, but we might see 5-10% increased output over 2016.”
Despite this, Gulkin does not think domestic production will be great enough to ease the country’s voracious appetite for imported raw material for processing.
He expects little change from 2016 in terms of European imports and consumption.
“2017 will be a little bit of both a buyers’ and a sellers’ market; nothing dramatic for either side,” he concluded.
“I think prices will soften to a degree, not significantly, over the next four to six weeks as production increases. Then prices should bottom out relatively quickly when the US majors step in for their holiday purchases, and move up to some degree.”
Contact the reporter neil.ramsden@undercurrentnews.com