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May 11, 2014

 

United States

Shrimp Prices Falling

 

On May 8, 2014, Urner Barry, which publishes shrimp market reports, said the market for headless shell-on white shrimp “is under considerable downward pressure” after already declining around 10% since the beginning of the year.

 

Anecdotally, exporters are dropping prices $0.30, $0.40 or even $0.50 cents a pound to keep sales flowing, leading importers to be cautious, as they wait to see where prices will settle.

 

One of the things driving this decline is a change in the Chinese market.  The strong cross-border demand for Ecuadorean shrimp via Vietnam into China has collapsed because there has been a crackdown on this illegal trade, which involved using thousands of fake Chinese personal identity numbers to bring shrimp from Vietnam into China.  Before the crackdown, Chinese citizens could take 600 kilograms of shrimp across the border duty free each time they entered the country from Vietnam, but they did not have to be present to do it.  An agent could simply present their identify number.  As a result, agents presented hundreds of fake identity numbers and brought in thousands of kilos of shrimp at a time.

 

China has now cracked down on this scam, and some officials have reportedly been arrested.  This has rippled back to Ecuador so the export business to China through Vietnam is slowing down.

 

At the same time, Seafood.com, a fishery news service, reporting on the first shrimp crop of the year in China, said harvests have been good and prices there were falling.  So both the smuggling crackdown and greater production of farmed shrimp are causing shrimp imports into China to drop.

 

The second thing driving the correction in prices is surging shrimp production in Ecuador, Indonesia and India.  Ecuador produced 53 million pounds of shrimp in March 2014, and as one importer said, “This is a phenomenal number, the equivalent of around 650 million pounds on an annual basis.  If Ecuador keeps this up, it will equal the numbers produced in Thailand before all the [EMS] problems.”  As a result, Ecuadorean farmers are dropping their prices sharply from week to week.

 

In its closing commentary for the week ending May 9, 2014, Urner Barry was negative almost across the board on shrimp prices, reporting steady to weak prices for headless, shell-on giant tiger shrimp, cooked shrimp and large (U-10 and U-12 tails) from the Gulf of Mexico.  The only shrimp items currently holding their own are peeled and deveined shrimp and large, whole, Gulf of Mexico shrimp because of the limited supplies prior to the opening of the fishing season.

 

Source: Seafood.com (an online, subscription-based, fisheries news service).  Editor and Publisher, John Sackton (phone 1-781-861-1441, email jsackton@seafood.com).  Shrimp Correction Well Underway, Huge Harvests in Ecuador, Slowdown from China Push Prices Down.  John Sackton.   May 9, 2014.

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