Indian shrimp prices rising fast as packers fight for raw material : Aug 15, 2018
Tom Seaman: UndercurrentNews
The prices for vannamei shrimp raw material in India are moving up fast.
Processors are fighting for reduced levels of raw material to fulfill orders, after farmers reduced stocking due to disease issues and the weak market, sources told Undercurrent News.
Prices for Indian raw material in week 32 (Aug. 6-12) are up 17-24% since week 28, when they seemed to have bottomed out, according to the Undercurrent prices portal. Meanwhile, prices for raw material in Vietnam — which have just been added to the portal — Thailand, and China are all fairly stable, as can be seen on the portal.
Prices for 50 count per kilogram of raw material have risen the fastest, increasing 24% from week 28 to INR 273 ($3.88)/kg. Prices for 30 and 80 count sizes were the slowest risers, increasing 17% from week 28 to INR 393 ($5.59) and INR 223 ($3.17), respectively.
“Big processors are struggling to complete orders and delays, maybe major, are now anticipated. New offers from processors are now scarce,” said Jim Gulkin, managing director of Siam Canadian Group , a Bangkok, Thailand-based, pan-Asian frozen seafood supplier with an office in India.
“Raw material shortages will continue through at least October and perhaps through year-end,” he told Undercurrent.
According to Gulkin, big processors in Andhra Pradesh, the main state for Indian shrimp farming, as well as packers in other areas, “are racing to complete major year-end sales orders against rapidly-declining raw material availability”.
The big processors in Andhra Pradesh, “most of whom have major orders still on the books, are buying raw material from Odisha and Gujarat to make up for the current shortfall” in their home state, he told Undercurrent.
Andhra Pradesh’s first major crop “is pretty much exhausted”, he said.
“Many packers still have pending orders for August and September ETDs [estimated time of departure],” said an Indian shrimp sector executive (source A), who preferred not to be named.
Durai Murugan Balasubramanian, secretary of the Pattukottai Shrimp Farmers Association in Tamil Nadu, also said there is “strong competition” among exporters to secure the last available raw material.
“My sources are telling [me] prices likely to bounce [to] strong levels in coming weeks,” he told Undercurrent. “The raw material availability in Andhra [Pradesh] has gone very low.”
The stocking suffered from severe “vibriosis and white spot” issues, he said.
Also, most farmers suffered from high feed conversion ratios due to white feces, another disease. This has meant many have switched to farming fish, claimed Balasubramanian.
“Going back to April/May, farmers began reducing pond re-seeding in terms of area, the number of ponds re-seeded as well as stocking density. This was widely anticipated due to stubbornly low prices and tepid demand. Hatchery sales dropped drastically and hatcheries tried to move product by offering farmers substantially reduced pricing. Many hatcheries temporarily closed down at that time,” Gulkin toldUndercurrent.
“There has been a drastic drop in raw material arrivals as farmers recently stayed away stocking for the new crop, due to the low prices and high disease risks. There have also been reports of white spot disease in many shrimp farming regions that caused high mortalities,” said source A.