Indian shrimp prices continue to firm in sellers’ market : April 12, 2016
Neil Ramsden : Undercurrentnews
Prices for Indian farmed vannamei shrimp continue to firm, as packers striving to fulfill contracts find themselves having to meet farmers’ asking prices.
Siam Canadian Group, which imports and exports frozen shrimp and seafood throughout Asia and beyond, noted in a trading update on March 22 that raw material prices were up between INR 5 and INR 20 per kilogram across various sizes.
“It appears prices will remain stable or move up further for at least another one or two weeks,” Siam Canadian noted.
As it turned out there was some volatility after that; prices fell for the week beginning March 28, before firming up again, though not quite to where they were. Sources put the latest – given for the week beginning April 3 – at INR 530 ($7.97) for 30 count; INR 430 for 40 count; INR 360 for 50 count; INR 300 for 80 count, INR 275 for 90 count and INR 250 for 100 count.
“Processors currently have to pay prices demanded by farmers to fulfill needs for pending contracts. March 31 being the fiscal year [end] is adding additional pressure,” the company said.
Some orders pending will incur losses of up to $0.90/kg losses,” Siam Canadian added.
Shrimp harvests have been providing adequate volumes, with availability on almost all sizes, but availability on smaller sizes – 70, 80, 90 and 100 pieces per kg – has improved even more so, the trader said.
Another source, buying Indian shrimp, told Undercurrent News on April 5 that both packers and buyers were using a “wait and see” strategy, while the farmers are also trying to hold the harvest with the new season just around the corner.
Farmers have been “very reluctant to entertain this price level” said the source, “and that is why they are hesitating to harvest until and unless the price rebound”.
This kind of situation has been dragged on for some weeks, he said. “A clearer picture on price trends can be expected very soon.”
The peak season should start in two weeks at the most [so the week beginning April 18], he said. “Now landings are available in all sizes, from 30 to 100 counts. We were also told that some packers in Orissa are planning to purchase raw material from Andhra Pradesh once the peak season starts.”
Chinese buyers are still the most active players, confirming orders for all sizes, starting from 21/25 and down (headless shell-on), he added.
Demand from Vietnam and other countries remains fairly low. Whether this remains the case for long is yet to be seen; reportedly 25% of Vietnam’s Mekong Delta has been damaged by high salinity, with the local government advising farmers not to stock ponds until the situation improves.
Meanwhile, another source has seen prices rising in the past couple of weeks – apart from the dip around March 28 – and predicts increases to come.
“Prices are moving up again; there seems to be greater demand for 60 counts from exporters,” confirmed Durai Balasubramanian, secretary of the Pattukottai Shrimp Farmers Association in Tamil Nadu.
“There is a strong case for prices being likely to move up in the coming months; compared to last year stocking has been really slow, with high input costs. EHP [Enterocytozoon hepatopenaei] is likely to be a great threat to farmers; many are worried, with slow growth and other viral diseases in shrimp.”
Farmers try to offset costs
Earlier in March, one shrimp trading source told Undercurrent it seemed Indian farmers were holding off on stocking in an effort to bring prices up – something which seemed to work throughout the month.
Farmers have been slow to stock ponds, confirmed Balasubramanian, though he suggested this was due to very high temperatures early in the year.
He also revealed that farmers are struggling under increasing production costs: “The most challenging factor this year is with feed prices.”
“[Farmers] have have seen vannamei shrimp feed go from INR 50/kg to INR 74/kg for cash purchase. Feed companies have to reduce the feed rates according to the market,” he said.
[Enterocytozoon hepatopenaei (EHP) is making it very difficult to grow shrimp to the desired sizes and feed conversion rates are also being pushed high, making shrimp culture hard to sustain, he told Undercurrent.
“Some scientists have come up with methods of eradicating EHP, but those methods involve so much money in preparing ponds, it’s almost impossible to do on a large scale,” he said.
“People who are successfully without EHP are at a density of 15 pieces per square meter – with this low density the current cost of production is difficult. I’m sure the recent price drop is temporary, and we’re likely to get stronger prices in coming months.”
In better news, farmers and hatcheries are working hard at testing for EHP, with tests confirming the presence of the disease and technical experts on site often.
Hatcheries are seeing low demand for shrimp seed though, he said, concluding that it is looking increasingly likely India’s overall production will be down year-on-year.