New supplies of white shrimp from Vietnam and India, along with a resurgence in production in Thailand after last year’s floods, are all expected to lead to plentiful supplies in the United States — and that will cause prices to fall.
Many farmers in Vietnam are said to be switching to white shrimp from black tigers, with as much as a 70-30 ratio in favor of whites. Similar reports are coming from India, said one longtime U.S. shrimp importer.
“That’s going to put an awful lot of white shrimp back into this market. It’s hard to get your hands around what kind of tonnage you’re talking about, but it will be significant. If Vietnam switches over, there’s going to be no shortage of shrimp in 2012,” the executive said.
“The volume was maintained by an increase in volume from India, which picked up about 15 to 20 percent over the previous year. We had plenty of product in the pipeline in the second half of the year and the market started to deteriorate because there was just too much of the large-sized shrimp in the market,” he said. “All of this means a lot more white shrimp in the marketplace, and that usually pushes prices down. But trying to predict when that is going to happen, and how it is going to happen, is very difficult.”
One seafood buyer for a restaurant chain said he’s seen a slight price decrease since the start of the year — about 20 cents — and expects more downward pressure as supplies stay strong. “I hear production from India is very strong, and their price point is like a buck less than ours,” said the buyer.
Although prices were up on average around 10 percent in 2011, white shrimp prices fell by about a USD 1 a pound late last year due to an influx of white shrimp from India, the shrimp company executive said. There was a significant carryover of shrimp from the fourth quarter and it will hamper sales of new product until the backlog clears.
According to the importer, prices for 31-35s and smaller are in the mid- to high USD 3 range, with 26-30s in the mid-USD 4 range, 21-25s in the mid-USD 5 range and 15-20s around USD 6 a pound.
“You’ve got product at the very top of the market pressing down now,” the executive said. “We haven’t seen much in the way of headless shrimp in the 31-35s and smaller in the U.S. market for most of last year. The farmers don’t want to pack them, they can’t make any money with it. They’ve been headed into the value-added market of easy-peel and peeled, and cooked peel-on and peel-off.”
Even though prices fell toward the end of the year, they are higher than previous years due to rising raw material costs and higher fuel charges. “In some cases the asking prices by packers are exceeding the U.S. market, so there’s no margin for the U.S. importer,” the supplier said.
Costs are being passed on to buyers, “to the extent that they can,” the importer added. “But there’s a limit to being able to do that. I would suspect most of the importers have suffered some losses this year on selling their higher-priced inventories.”
Producers will look to the U.S. market because of economic troubles in Europe and reduced buying from Japan, although the Chinese are importing more shrimp to meet domestic demand, the importer said. “Countries like Ecuador, which depend on about half of their production going into Europe, probably will be impacted,” he said.
