|Home • Previous Page • Site Map|
November 13, 2014
Shrimp Prices Falling
Since October 1, 2014, the USA white shrimp market is showing signs of weakness, with prices for headless shrimp down 4.2% and prices for value-added (cooked and peeled) shrimp down 2.4%, according to Urner Barry’s shrimp price indexes. Tiger shrimp prices, however, continue to rise.
In the current climate, buyers are on the sidelines and only purchasing for their immediate needs. This is a typical reaction when buyers feel the market is moving in their favor. There are plenty of inquiries about shrimp, but not many buyers are pulling the trigger on large orders.
Urner Barry sees three factors contributing to the price slide, none of which are likely to change in the near term.
First, USA shrimp supplies have jumped over last year. Through September 2014, total shrimp imports are up 12.1% for the year. The USA is on track to set a record this year for shrimp import volume, with year-to-date imports of all types of shrimp slightly ahead of 2011, the previous high point. This means many individual items have ample supply.
Second, some of the factors that contributed to the strong international demand for shrimp, which pushed up prices in the USA, are weakening. China currently is well supplied by its domestic shrimp farmers and is not as aggressive in its purchasing as it was earlier this year. In fact, there are anecdotal reports of Chinese buyers walking away from earlier deals. Strong Chinese buying was a significant factor in the prices increases on the international market during the first three quarters of 2014.
Another factor is the strength of the USA dollar against the Euro, the Chinese Yuan and other currencies, making the USA a more attractive market for exporters. For Ecuador, whose shrimp sales are denominated in dollars, it means that their other customers are seeing an effective price increase, while USA buyers are not. Also reflected in the currency swings is the relative economic strength of the USA and Europe. Europe is again becoming a weaker consumer market as many countries struggle with recession, and in some countries, actual deflation. So currency and economic factors are attracting more shrimp to the USA market.
Third, the impact of EMS is receding and shrimp supplies are increasing. In the hardest hit countries, some progress has been made in managing the outbreak. In Thailand, for example, CP Foods, expects its shrimp farming division to return to more normal production in 2015.
In the meantime, countries that were not hit with EMS, including India, Ecuador and Indonesia, have ramped up production significantly. And Vietnam, which was hit, has also managed to increase domestic production.
What does this mean for the future? Most market trends continue in one direction until something happens to change the dynamic. For shrimp, the next opportunity will likely be holiday sales in the USA and the Chinese holidays (January and February 2015).
In the United States, retailers have shrimp on hand or have already ordered it for the holidays. If sales are stronger than expected, or if they look to be successful, these buyers will all come into the market at the same time.
In China, the current flood of domestic product is partly seasonally driven, as it is the end of the outdoor shrimp-harvesting season. Again, if demand were stronger than anticipated around the Chinese holidays, this would again motivate importers to increase their purchases of shrimp.
Source: Seafood.com (an online, subscription-based, fisheries news service). Editor and Publisher, John Sackton (phone 1-781-861-1441, email firstname.lastname@example.org). US Shrimp Market Weakens Over Last Six Weeks as Buyers Retreat to Sidelines. John Sackton. November 12, 2014.
|Home • Previous Page • Site Map|