Following a seasonal lull in September and October, the U.S. spot market for shrimp picks up in November and December, as suppliers scurry to satisfy buyers' last-minute holiday needs. But this year's late summer/early fall spot market was "exceptionally quiet," especially at the foodservice level, said one shrimp industry veteran.
It's clear the U.S. shrimp market is still feeling the effects of the recession. Case in point: Indonesia is experiencing production difficulties this year due mainly to a white spot virus outbreak . According to the industry veteran, some Indonesian packers are unable to meet contract obligations and are forced to acquire raw material from outside the country.
As a result, U.S. shrimp imports from Indonesia were down 36 percent in July and 41 percent in August from the same months last year. Through August, imports from Indonesia barely reached 111 million pounds, down 16 percent from the same period last year.
But the response from the U.S. shrimp market has been lackluster, and prices are holding firm or even dropping despite the production shortfall from the United States' No. 2 shrimp supplier last year. In a typical year, prices would likely rise. In mid-October, Southeast Asian-raised Pacific whites were quoted in the mid-USD 3 range for 21-25s and 26-30s.
What's more, large whites from Mexico are hitting the U.S. shrimp market at an increasing rate, adding to the downward pressure on prices. Through August, U.S. shrimp imports from Mexico topped 35 million pounds, up an impressive 75 percent from last year. By mid-October, Mexican-caught whites were tagged in the high-USD 3 range for 21-25s and mid-USD 3 range 26-30s.
For suppliers, it's been a tough year, and margins are only thinning. "Companies seem to be hunkered down, maintaining lower inventories, keeping their operating costs as low as possible and waiting for some positive indicators in the economy," said the industry veteran.
October 25, 2009
