Weak euro could become ‘moot point’ amid expected low shrimp prices : April 22, 2015
Tom Seaman – UNDERCURRENT NEWS
Buying is slow in Europe in shrimp, with the weakness of the euro meaning the fall in prices at the source are not being reflected in the prices to importers.
Imports throughout the EU, including the UK, have slowed.
“Certainly part of that is a result of importers and end users holding off purchases in anticipation of lower pricing,” Jim Gulkin, managing director of Bangkok, Thailand-based Siam Canadian Group, told Undercurrent News.
“It is likely, however, that the overall lower pricing in the shrimp sector will more than compensate for the exchange rate differential,” he said. “As a result, the weaker euro may be a moot point and consumption may rebound to some degree.”
Expect US, Canada and EU purchasing to increase through May and June, said Gulkin.
“Origin pricing will likely bottom out at that time and will trend higher for Q3.”
Overall, the markets have been mostly on the slow side for Q1 2015 with origin pricing trending weaker, said Gulkin.
“EU consumption has been slow. The exchange rate has had a big impact and overall uncertainty in the economy — worries about Greece is certainly a factor — is creating some level of caution amongst consumers,” he said.
In the US, inventory after the New Year was fairly high in addition a rough winter in the northeast made for poor restaurant trade despite an improved economy, thus food service sector was affected, said Gulkin.
“US importers and end users have been cautious in terms of placing forward orders as the outlook for shrimp production in Asia and South America is looking good and thus most indicators are pointing to lower pricing this year,” he told Undercurrent.
Importers and end users are to a large degree sitting on the fence awaiting to see what pricing is going to look like once Asian production is in full swing.
“However, there are deficits starting to appear in inventories and purchasing has already started to pick up but the heavy buying won’t likely start until May or June,” said Gulkin.
“China consumption has slowed compared to last year partly as a result of their slowing economy. The government crack down on government officials entertaining habits has also definitely had an impact. Japan consumption remains static.”
Production is expected to be higher over 2014. A lack of interest in purchasing countries has contributed to lower pricing, however.
“Indian pricing has mostly been trending lower this year although there have been some upward bumps as well,” he said.
“Strict financial oversight by Indian banks and limited cold storage space for many producers can often result in quick downward pressure on prices when the market slows.”
Thailand production is expected to improve this year.
“The picture will be clearer in May. Pricing has mostly trended lower but again, some upward movements as well,” he said.
“Indonesia pricing has trending down also, again mostly a result of lack of new orders. Indonesia is already past their peak production season. Vietnam production gets underway in April/May.”
Contact us : Siam Canadian Group Frozen Seafood Exporter for more formation: