Described by one industry veteran as “in the doldrums,” the U.S. shrimp market is crawling through a traditionally lethargic period, with orders already in place for the upcoming holidays and spot purchasing yet to heat up.
But this downswing is being aggravated by an anemic economy and a lack of consumer confidence, seemingly the only factors preventing prices from increasing right now. U.S. inventories are low, but apparently not low enough to ignite demand.
“While any future forecast of market direction is difficult, especially in times of economic malaise, a market correction to the upside may be very possible this fall and winter. As supplies [drop], a turnaround in demand could very easily drive up prices,” said the East Coast-based industry veteran.
“But a lot depends on the economy,” he warned. “If the economy dips back into another recession, all bets are off.”
It appears that large retail and foodservice operators waited most of the summer for prices to drop and a buying window to open up. But that never happened, and they stepped in and placed orders to ensure they have enough product for the holidays.
“These contract deals made purchases for the spot market even more difficult due to the shortage of raw material and high replacement costs,” explained the industry veteran. “This resulted in lower than normal on-hand inventories in the United States. Most of these ‘spot’ inventories are held at higher costs, making margins and profits questionable.”
For now, what’s available is going to the highest bidder.
In mid-September, shell-on, head-off Asian-raised Pacific white shrimp held firm in the high-USD 4 range for 21-25s, mid-USD 4 range for 26-30s, high-USD 3 range for 31-35s and 36-40s and mid-USD 3 range for 41-50s and 51-60s. Latin American-raised Pacific whites were quoted in the mid-USD 5 range for 21-25s, mid-USD 4 range for 26-30s, high-USD 3 range for 31-35s, mid-USD 3 range for 36-40s and 41-50s and low-USD 3 range for 51-60s.
