US shrimp market expected to pick up with celebrations arriving : January 27, 2015
Demand is soft but Lent, Superbowl and Valentine’s Day — coupled with optimism about the economy — should spark activity.
Dominic Welling : Intrafish
While the United States market for shrimp is fairly weak coming off the back of the holiday season, as the economy rebounds and other holidays approach, industry players are expecting it to pick up.
“In the US, the holiday consumption was not great, but wasn’t as bad as expected,” Jim Gulkin, managing director of Siam Canadian Group, told IntraFish.
According to Gulkin, it is never a “homogeneous situation” in the seafood market and while in certain areas of the US there has been satisfactory consumption, in others it has been dragging.
However, he said the US economy is looking up, the US dollar is stronger, and oil prices are down so “consumption going through Lent I expect to be good in the US,” he said.
“I expect through Superbowl and Lent, consumption will improve, because it is an economy everyone is thinking about,” Gulkin told IntraFish. “The US is the one bright spot, everywhere else is looking pretty tepid.”
Looking at the global picture, Gulkin said demand for shrimp is pretty flat, if not on the weak side at the moment, but supplies are not what were expected so far, either.
For example, in India supplies are down, while Indonesia is also running into difficulties with some diseases, which is pushing down production.
“This is their peak production period (Nov-Feb) but it is dropping off much faster than expected, and is going to end up a bit short, so prices are moving up there,” he said.
Meanwhile, in Thailand and Vietnam production has not got into gear yet, so there is not likely to be any significant production to speak of until April or May. Likewise no production is expected from China until June.
“Demand overall, except in the United States, will be on weak side, but production is going to be on the low side as well so I tend to think there’ll be a balancing out effect there,” he said. “The demand isn’t there so there is a reluctance, resistance to increase in price right now.”
Jeff Stern, VP of purchasing at US shrimp supplier Central Seaway, said demand in the United States is in-line with expectations. “It seems like it’s been lower than last year, but it’s difficult to say,” he told IntraFish.
However, according to Stern, prices overall are anywhere from 5-15 percent less than they were in October. “I think there is just a lot more supply on the market than the expectation was,” he said.
According to Stern there has been a “slight uptick” in the small-sized headless shrimp coming out of South America as the Chinese seem to have stepped up their purchasing a little bit.
“We don’t know if that trend will continue or if it was just a temporary trend,” he said.
“We’ve seen a little uptick in purchasing from China and India, while the Indians have raised their prices. But the US market continues to be weak. We’ve seen a little more stability but it is still pretty soft.”
However, Stern said the upcoming Superbowl, Valentine ’s Day and Lent period in the United States, can all be good things for consumption.
“We expect prices to level out, we might see a little decrease or increase but we’re not looking for any major changes over the next 60 days,” he said.
As for China, the Chinese New Year demand seems to be lower than in previous years, added Gulkin.
Domestic consumption in China has dropped due to two main factors, he said, including a slowdown in the economy and the government crackdown on state officials’ expense accounts.
“There are less officials entertaining and that actually has quite a big effect,” he said. “And the economy is slowing down, with people less secure about spending money. All this means demand is down in China.”
All quiet…for now
A source with one major European shrimp supplier told IntraFish the market in general is all a bit quiet at the moment.
Prices have been fairly high generally, and demand is low, he said.
“If we look at Thailand we see prices rising slightly but a lot of that is just lack of supply rather than any super demand,” he said.
Meanwhile, much of what Vietnam is producing – which is down to just 200 metric tons per day for vannemei, the source said — is going into the local market in time for the holiday season and Tet festival.
“Chinese traders are normally aggressive at this time of year, but this year it is very quiet. Maybe they have their own supply or bought earlier in the year or the changes in the economy are having an impact,” he said.
Additionally any changes in prices in Indonesia and India are mainly down to foreign exchange anomalies rather than any changes in demand.
“What we are hoping to see is better management of EMS going forward and therefore a slight growth in supply, because otherwise if prices remain at this level, demand will remain relatively small,” the supplier said.
And a lot of it will rely on China, and how successful they are at managing EMS, he added.
“When they were buying in the market that really drove up prices worldwide, because there wasn’t enough supply, but if they become self sufficient again, that takes a lot of pressure off the market,” he said.
As an indication of price levels coming out of India, for vannamei headless shell on individual quick frozen, delivered duty paid in the United States, for sizes 16/20 the price is currently around $5.40 (€4.80) to $5.75 (€5.10) per pound, while for sizes 26/30 it is $4.25 (€3.75) to $4.50 (€3.95) per pound.
For vannamei cooked, peeled and deveined, tail on individual quick frozen products from India, prices are around $6.20 (€5.5)-$6.40 (€5.7) per pound for sizes 26/30 and $5.70 (€5)-$5.90 (€5.20) per pound for sizes 31/40.
As an indication of prices coming from Thailand, vannamei headless shell on individual quick frozen, delivered duty paid in the United States , sizes 26/30 are $4.80 (€4.20) per pound, sizes 31/40 are around $4.20 (€3.70) per pound, and sizes 41/50 are around $3.90 (€3.50) per pound.
For vannamei cooked, peeled and deveined, tail on individual quick frozen products from Thailand, prices levels are around $6.20 (€5.50) per pound for sizes 26/30, $5.60 (€4.90) per pound for 31/40 and $5.20 (€4.60) per pound for sizes 41/50.