Global shrimp supply will remain high for foreseeable future
The glut in the global supply of shrimp that persisted throughout 2018 will remain in 2019, as cold storage facilities in the United States continue to have supplies lasting months in storage.
A panel of experts at the Global Seafood Market Conference in Coronado, California on 17 January said cold storage facilities in the U.S. had, at times, 30 percent more shrimp in storage in 2018 than they did in 2017.
In addition, the panel predicted that the reserves will not be drawn down significantly in 2019. The primary reason for that is production of shrimp in India, which panelists said will remain close to its record high of 740,000 metric tons (MT), with production in other countries starting to increase as well.
“It all comes back to, 'What are we going to do with all this shrimp?'” said Jeff Goldberg, president of Fortune Imports.
Estimates indicate that there’s 290 million pounds of shrimp currently in cold storage facilities in the U.S., representing a supply that, with no further production or imports, could last more than three months.
That high amount of supply in storage is coupled with increasing supply coming from countries like Ecuador. Between 2013 and 2018, production of shrimp in Ecuador more than doubled, going from 219,412 MT to 471,026 MT.
Ecuador and India aren’t the only countries with increasing supply. Indonesia, Vietnam, and Mexico also saw growth. The most dramatic growth occurred in Guatemala, which has consistently increased between 30 to 40 percent year-over-year.
“In the last two years, Guatemala has added 87 farms,” said Bill Hoenig, market development director for Best Aquaculture Practices. In the last few years, that production has been 25,000 kilograms per cycle, per hectare, and running three cycles a year.
“They’re adding 25 million pounds to the kitty,” Hoenig said. “It’s these little micro things, it happens here it happens there, but it’s an indication of what can happen.”
In the past, high shrimp producing countries like Vietnam faced the possibility that a disease – such as white spot – would cause dramatic reductions in production. Rapid increases in the understanding of genetics and farming techniques have largely mitigated outbreaks in recent years.
Another factor influencing future production levels is lower prices as a result of the glut of supply. That's causing producers to cut back on expansion plans, with farmers in India, particularly, facing obstacles.
“The lower prices are definitely tampering some of the expansion plans that some of the farmers have, that some of the plants have,” Jeff Stern, vice president of purchasing for Censea, said.