Signs of firming prices in US shrimp market Increases are expected after Asian harvesting seasons end: July 24, 2018
John Evans : IntraFish
US shrimp suppliers canvassed by IntraFish said they are starting to see signs of firming prices after imports from Asia kept prices down in the first half of this year.
This comes after oversupply and high inventories left US prices “very soft.”
The trends were spotted by executives at Siam Canadian, which ships more than 1,500 containers (15-18 metric tons) of shrimp annually to North America from Thailand, Indonesia, India, Vietnam and China.
“The US market has been very, very flat this year and it’s starting to pick up slowly; still the demand is not strong,” Siam Canadian Managing Director Jim Gulkin told IntraFish.
But Gulkin foresees “good overall consumption” in the US market this year against the background of a strong economy. He said the weaker price trend in India and Indonesia has halted now with prices firming pretty much in all origins.
Working in so many markets across the Asian region requires paying close attention to events on the ground.
Gulkin said Vietnamese production was “good” for the first part of the year but is tightening up now as farmers back off reseeding, meaning yields are expected to be pretty tight for much of the rest of the year.
Much higher prices are now being seen in Thailand amid tight supply after producers cut production because of low prices.
In Indonesia, after the main production season ended, prices have moved higher as supply tightens.
This is likely to make a big difference because Indonesia has been one of the most competitive supply sources this year.
Seasons less defined
Normally production season is November to February but the season rolled on as seasons are becoming less strictly defined in all producing countries.
At the same time prices have bottomed out in India, and while prices have not moved up massively, production has become tighter.
With many suppliers already having US orders, they are reluctant to take on new business as they work to ship out existing orders.
“I think prices out of Asia should remain fairly firm, I think any sort of drops are unlikely,” Gulkin said. “I don’t expect any major increase either and expect prices to be overall firm to the end of the year.”
In India, which has moved to become the world’s leading producer over the past decade at the expense of Thailand, it is normally a time when producers look to restock ahead of the second producing season, although according to one Indian product importer into the US, many may opt to reconsider.
“The second crop is always riskier due to weather factors and farmers might be a little slow in stocking the ponds,” he said.
While much rests on the levels farmers decide to restock and stocking densities in India, packers are busy meeting pending orders for the next three or four months.
“On pricing people expect the bottom has gone because of raw material prices in the past two or three weeks,” added Gulkin, whose company ships close to 33 million pounds of shrimp annually to the US.
Seafood Exchange does the majority of its business in the US retail market for hand breaded, marinated, glazed, flavored among other value added shrimp products.
Company President Travis Larkin expects to sell around 5 million pounds this year, slightly up on 2017.
He said it is a trend reflected by other businesses in the sector who are finding innovative ways to move more shrimp, amid availability as buyers experiencing few problems meeting requirements.
“I think our market here is simply still trying to adapt to what seems to be the new state of affairs, which is large volumes of shrimp available pretty much all year round,” Larkin said.
In recent months higher-than-expected shrimp imports from all the major producing countries depressed prices but now there appears to be signs of a correction.
“There are at least murmurings in the market that prices are firming a little,” Larkin added.