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June 5, 2014

The World

Shrimp Prices Rebound

 

European Price List, FOB, Central American, Color A3, Whole Shrimp
Size Average Weight/Grams Price
30/40 28.6 $8.75
40/50 22.2 $7.75
50/60 18.2 $7.20
60/70 15.4 $6.80
70/80 13.3 $6.75
80/100 11.1 $6.55
100/120 9.1 $6.20

Jose Bolivar Martinez (“Boli”, bolimartinez1959@yahoo.com), president of Grupo Farallon Aquaculture, which operates shrimp hatcheries (“Mega Larva”) and farms in Panama and elsewhere in Latin America, reports:

 

In Mexico, I hear shrimp farmers are refusing buyers’ prices because production from farms is low.  Instead, they are delaying harvests, hoping that prices go higher.

 

In Central America, prices seem to have hit bottom, and we have seen a rise in demand during the last ten days as orders from Europe increase.  On orders from Europe and Mexico, prices are up $0.25 to $0.30 a kilogram from last week.

 

I believe prices are rising for the following reasons:

 

• Increased demand in Central America from Mexico because production is down in Mexico

 

• Increased demand from Taiwan because a free trade agreement with Central America

 

• The Soccer World Cup is coming up within days and a lot of bars and restaurants in Europe, and for that matter, everywhere in the world, will be selling the king of appetizers—shrimp!

 

• Many warehouses in Europe and USA have low inventories going into the summer, which may create a buying panic.

 

I wonder if what I am seeing in demand coincides with other producers in other parts of the world.

 

Daniel Gruenberg (seagardenfoods@mac.com), CEO of Sureerath Prawns in Thailand, responded to Boli’s comments:

 

In the last two days in Thailand, prices have been shooting up.  In the 80 to 100 count-per-kilo range, prices have risen $0.15 to $0.30 at the farm gate for whole shrimp.  There is a prolonged hot season, and the monsoon is late.  Both of these factors seem to be contributing to difficulties in production.

 

Undercurrent News has published an article that Thailand seems to be having a hard time making a recovery.

 

Vietnam also seems to be falling on hard times as rampant antibiotic use has resulted in a number of container rejections in Japan.  I do not see any significant supply increase from India.

 

I don’t see any major increase in volume from any the non-EMS shrimp farming countries that would make up for the losses from the countries with EMS.  I hope to see prices go back up to a point where farmers feel safe to stock their ponds and take a risk on new production. I also hope that buyers realize that the recent dip in prices was just a temporary blip and that they need to keep prices high enough so that farmers feel safe enough to stock their ponds.  At the recent low prices, I saw a lot of empty ponds.  That is only going to make the supply situation worse, so prices will increase as we get further into the season.  Too bad buyers chose to play speculative games without relying on fundamentals.  They are just shooting themselves in the foot by delaying purchases.   My prediction is that prices will show a strong upward trend over the summer.

 

Source: The Shrimp List (a mailing list for shrimp farmers).  Subject: Prices Follow Up.  Boli Martinez and Daniel Gruenberg.  June 4, 2014.

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