Market Report- Shrimp

Canadian coldwater shrimp in need of buyers

By Mercedes Grandin, SeafoodSource contributing editor

24 August, 2009 -  The Canadian coldwater shrimp (Pandalus borealis) industry is facing a difficult 2009 marked by weak demand, reduced supplies and low prices. A tough global economic climate and a depreciated Canadian dollar have resulted in unfavorable returns for Canadian shrimpers but favorable prices for seafood buyers worldwide.

Canada's coldwater shrimp harvest totaled more than 170 million pounds in 2008. But this year's catch is expected to reach only 100 million pounds. Low prices forced Canadian shrimpers to tie up their boats and processors to halt their operations earlier this year. The industry has been hit hard by declining U.S. foodservice sales, the major channel for coldwater shrimp in the U.S. market.

Meanwhile, prices are down 30 to 35 percent from their 2008 peak, but shorter supplies due to lower Canadian landings are expected to drive up prices in the near term. In the U.S. market in mid-August, frozen coldwater shrimp from Canada was tagged in the high-USD 3 range for 125-175s, mid-USD 3 range for 150-250s and 175-250s and low-USD 3 range for 250-350s.

In Europe, demand is also weak, but it's expected to pick up once inventories held over from 2008 are moved and in need of replenishing.

"EU purchasing is more of a hand-to-mouth purchasing pattern versus large volume buying as in past seasons. Demand has declined due to global economic conditions, but not dramatically," says an industry representative in Canada. "Prices have fallen to the early part of the supply chain, but final consumer prices are relatively stable."

Additionally, Atlantic Canada's shrimp industry is feeling the heat from their U.S. West Coast counterparts, who have increased the presence of its coldwater shrimp (Pandalus jordani) in the Canadian market.

According to Astoria, Ore.-based distributor Bornstein Seafoods, supplies of West Coast shrimp are adequate but down compared to 2008. Exports are also down and boat prices have plunged more than USD 1 a pound compared to last year.

"Supply is good but could be better. Most packers have boats on limit due to a lack of demand. The biggest challenge this year is finding a market both in the U.S. and in exports, as well as a favorable exchange rate," said Darren Freels, a Bornstein sales representative.

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