Shrimp prices staying firm through 2017 as harvest peak passes in Asia : August 17, 2017
Shrimp producing countries struggle to compete against Chinese brokers buying up raw material.
Kim Tran : Intrafish
Shrimp prices started high and may stay that way for the rest of 2017 following production issues in some countries as well as continued aggressive buying of raw material by Chinese brokers.
“We saw prices were high and firm at the beginning of the year,” said Jim Gulkin, managing director at shrimp supplier Siam Canadian. “Prices have been favorable for US buyers and I predict prices will stay firm through the end of the year.”
He told IntraFish Indonesia has ongoing production problems and in Vietnam overall production has still not yet returned to its 2010 levels but is better this year than last year.
Vietnam is competitive with cooked shrimp, using both local and imported raw material but it’s having a hard time competing on EZ peel, in which Indonesia has been the category leader on pricing so far this year.
Another challenge for Vietnam is competition for its raw material.
“Although production improved from last year, farmers still need more raw material than they can obtain for its factories because Chinese brokers are buying a lot of raw material right now,” said Gulkin.
“China buys raw material from shrimp producing countries, ships it back to China fresh or uses third-tier factories in those countries to process it in simple block form.”
These factories are often unregulated and uncertified, he added.
Thailand’s shrimp production is also better this year than last year, but has seen the same situation as Vietnam, with China aggressively buying raw material from its farmers, doing basic block processing in Thailand and using it largely for domestic consumption within China.
“Thailand is traditionally strong in small and medium sizes but this year they’re growing out shrimp longer to bigger sizes so they’re stronger this year on larger sizes and the smaller sizes are being strained. Also, India and Vietnam are not competitive on small-size shrimp, which is making the prices for smaller shrimp go up.”
India’s shrimp production is up this year over last year, with more factories and pond area, but it’s still aggressively growing more shrimp so there are production issues – two steps forward and one and a half steps back, said Gulkin.
Indian shrimp season is peaking with landings ending about 15 days ago with high volumes so prices are already rising.
India raw material prices will not likely drop for the rest of the year as peak harvest has passed and there are a lot of orders on the books going to the United States and Canada as well as to a lesser degree to the EU retail market.
US and Canadian markets have strong demand, with retailers placing big orders and more to be placed, predicted Gulkin. Lastly, Bangladesh is producing less black tiger shrimp than in 2015 and previous years.
US shrimp imports through June jumped 9 percent and 15 percent in volume and value, respectively, compared to the same period last year.
The United States imported 286,769 metric tons of shrimp through June worth $2.8 billion (€2.4 billion), 9 percent and 15 percent jump in volume and value, respectively, compared to the same period last year, according to statistics released by the National Marine Fisheries Service (NMFS).
“The bottom of the market has come and gone so I don’t see any reason for the price to go down going forward,” he told IntraFish.
“Except for Indonesia, the Asian peak production seasons have passed so there’s no likelihood the prices will fall for the rest of the year for shrimp producing countries.”
Here’s a breakdown of US shrimp imports from these major shrimp-producing countries through June this year compared to the same period last year:
- India: 85,681 metric tons worth $837.3 million (€711.7 million), a 59 and 64 percent plummet in volume and value, respectively.
- Indonesia: 56,366 metric tons worth $563.3 million (€478.8 million), a 4 percent drop in volume but 4 percent gain in value
- Thailand: 30,282 metric tons worth $315.6 million (€268.3 million), a 10 and less than 1 percent drop in volume and value, respectively.
- Vietnam: 22,672 metric tons worth $246 million (€209.1 million), a 17 and 16 percent plummet in volume and value, respectively.