Shrimp prices up due to high freight rates
Supply
Raw material supplies in Asia were unpredictable during July–September of 2021. In India, production was adequate for export processing, although there were reports of disease occurrence in some areas. Supplies remained moderate in Indonesia. In Viet Nam farm shrimp production as well as exports have been seriously disrupted by the COVID-19 outbreak and subsequent restrictive measures. Production in Thailand was also low and resulted in a 165 percent rise in frozen shrimp imports (25 000 tonnes) for export processing. Farmed shrimp production in Ecuador remained stable with increasing exports.
After good catches during June-August, shrimp fishing in Argentina started to slow down from September due to severe logistical challenges in the supply chain (a shortage of containers for shipments to the European Union). As a result, cold-storage holdings in Europe remained limited. In the United States of America, shrimp landings in the Gulf of Mexico during January-June 2021 were 11 611 tonnes, the lowest level recorded in the last 20 years.
Meanwhile, container shortages for exports remains a major challenge worldwide.
International Trade
Nonetheless, international shrimp trade remained steady with increased imports, particularly in the western markets.
Exports
Shrimp exports increased from most countries including China, but slowed down from Viet Nam and declined in Thailand due to raw material shortage and restrictive measures in both countries to combat the COVID-19 outbreak.
Ecuador, the top exporter, sustained positive sales growth during the first half of 2021. Increased exports to the United States of America and the European Union significantly compensated for export shortfalls to China, its top market. Shrimp exports also increased from India, Indonesia and Argentina.
For the first time in many years, China reported increased shrimp exports during the first half of 2021.
Imports
Steady retail demand and the reopening of the foodservice sector in the United States of America and European Union have kept the international shrimp market strong during the second and third quarter of 2021. Imports increased in most large and medium markets but China.
Europe
In response to this strong demand, shrimp imports during January-June 2021 in the European Union reached a 5-year high at 367 300 tonnes, an increase of 16 percent compared to same period of last year. Imports increased in every market except Austria and Malta.
Shrimp demand was equally strong in the Russian Federation where imports increased by 74 percent at 41 690 tonnes during the review period. Among the others, the United Kingdom of Great Britain and Northern Ireland reported a rise in imports (+8.6 percent; 32 855 tonnes) but the trend in the high-end Swiss market remained flat (+0.90 percent ; 3 455 tonnes) against the same period in 2020. In Ukraine imports increased by 97 percent at nearly 10 000 tonnes compared with 4 800 tonnes a year ago.
United States of America
To ensure enough supply in the total distribution chain, an additional 100 000 tonnes of shrimp were imported into the United States of America during January-June this year compared with same period of 2020.
Cumulative imports during January-June 2021 were 30.6 percent higher at 404 360 tonnes worth USD 3.4 billion. Peeled shrimp had the highest share (44 percent; 180 000 tonnes) in total imports followed by shell-on (31.6 percent; 127 700 tonnes), cooked shrimp and other processed preparations (15 percent; 61 345 tonnes) and breaded shrimp (7.17 percent; 29 160 tonnes). Small head-on, cooked peeled tail-on, and ready-to-eat products have been the most demanded items in the retail trade.
Imports from the top four exporters namely India, Ecuador, Indonesia, and Viet Nam, increased by two-digits. India increased supply by 28 percent but lost market share compared with 2019 and 2020.
Ecuador had the highest export growth (+86 percent) to the US market and increased market share from 13 percent in 2019 to 22.4 percent. There were significant increases in exports of the main product groups (shell-on by 70 percent, peeled by 122 percent, and breaded by 110 percent).
China
Since September, overall demand started to improve in the HORECA sector due to the mid-autumn festival in September and the weeklong National Day celebration or Golden Week Holiday from 1 -7 October (the longest public holiday in China besides the Chinese New Year). Reportedly, trade inquiries for Ecuadorean shrimp have increased from September following reduced local stocks.
Japan
Unlike the western markets, summer demand for shrimp in Japan was disappointing this year due to the COVID-19 restrictions.
Compared with 2020, imports increased marginally (+4.4 percent; 94 000 tonnes) during January-June 2021 associated with better demand for processed shrimp. The top exporters to the market was Viet Nam, Indonesia, India and Thailand.
Since early October, the catering trade has started to procure supplies in preparation of better business opportunities during the year-end high consumption season.
Others in Asia-Pacific
With improvements in the pandemic situation and easing of restrictions in the restaurant trade, overall demand improved in most of the regional markets. Imports increased in the Republic of Korea, Taiwan Province of China, Hong Kong SAR, Malaysia, and Singapore. Interesting to note is the rise in exports from Ecuador to these markets during the review period.
Prices:
In Ecuador, the average export prices have risen to around USD 6.00 per kg, the highest level recorded since December 2018 amid strong demand from European and US markets.
Outlook
Farmed shrimp harvest in Indonesia will likely be good in October/November. But for the rest of Asia, October-February/March will be, as usual, the low production season. In Latin America farming will be in full swing until early March in favour of Ecuador, the largest producer/exporter.
US production of domestic wild-caught shrimp that generally contributes 5-10 percent in total shrimp supply in the market, will be lower this year affected by Hurricane Ida in September. The increase in fuel prices will also make production cost rise for sea-caught shrimp.
However, overall shrimp demand will be good in most markets during the year-end holiday season. In East Asia the two New Year celebrations (Gregorian and Lunar) will keep regional demand strong until February 2022.