Hesitant shrimp buyers pushed down prices this year, but exec tells IntraFish improvement in Thailand and growth in India will be developments to watch.

Kim Tran – INTRAFISH

This year has been tough for the shrimp market and Siam Canadian Managing Director Jim Gulkin predicted this in his 2015 outlook last year.

He told IntraFish at the time they “expect shrimp market to remain weak for much of 2015″and earlier this year, IntraFish reported that the world shrimp market is still lethargic despite low prices. The US market is also still lagging behind despite dropping prices due to the industry recovering from the Early Mortality Syndrome (EMS) shrimp disease.

Gulkin mentioned last year the industry needs more recovering in 2015 from EMS-related issues.

That seems to be the case with some countries. Panama’s directorate of animal health for the ministry of agricultural development (MIDA) announced this past summer it became free of EMS.

Here’s a look at his 2016 outlook for the industry:

What were the three most significant developments for your business in the seafood industry in 2015?

1) A very unstable and unpredictable shrimp market throughout the year. Importers and end users in many countries had difficulty working through high priced inventories. Prices continued to move down during the course of the year, finally bottoming out in India in August, and October/November in Thailand. Many orders which should have been booked from May-August were delayed as buyers were awaiting lower prices. Many buyers were sitting on the fence.

Now prices are climbing again as buyers scramble to fill requirements. The pendulum keeps swinging broadly and that makes business more challenging.

2) Thailand’s recovery from EMS. It happened sooner and more definitively than most had predicted. A lot was learned from EMS and the stage is now set for much improved production in the future. Although the raw material production is still far from where it was 2010-2011, it is continuing to grow in a measured and sustainable fashion.

3) Ongoing challenges with shrimp production due to disease, weather and lower seedings by farmers due to low prices. China had a big drop in production. India production increased but much less than expected due to disease issues as well as recent flooding in the east. Indonesia production was also facing challenges. Vietnam imported very substantial quantities of shrimp from India for further processing. Vietnam became one of India’s largest export markets.

Looking ahead, what will be the three most important developments in 2016?

1) Thailand production is expected to continue to recover in 2016. Thailand will continue to take back some market share but will face challenges having higher cost structures than other origins.

2) India’s shrimp processing capacity will grow in leaps and bounds over the coming years with existing factories expanding their facilities and many new factories opening. This will likely keep some upward pressure on India raw materials but all processors will be pressured to keep prices low to remain competitive in an expanded field.

3) New trade agreements such as Vietnam’s free trade agreement with the EU should have some impact.  The effects of the TPP remain to be seen.

What changes and developments do you expect your business to undergo next year?

We expect trade between our different offices to grow with more shrimp being shipped to Vietnam and China for further processing. India and to some degree Indonesia will be the main benefactors.

Siam Canadian’s Thailand import arm, Siam Canadian Gourmet Limited, will continue to grow its import business into Thailand of various seafood products from around the world including buying from various Siam Canadian offices.

Overall we expect our business will continue to grow and we will continue to expand our product range, supplier base and customer base.

Source:

Contact us : Siam Canadian Group Frozen Seafood Exporters  for more formation:
Email: info@siamcanadian.com