Uncertainty over Thailand’s disease problem and the outcome of the U.S. countervailing duty (CVD) dispute (see Top Story, p. 28) are putting the shrimp industry on edge, but one thing the industry is certain of is prices are going higher.
With a potential downturn of 30 percent in Thailand’s shrimp output due to the early mortality syndrome (EMS) problem, all eyes are on the world’s largest shrimp-producing nation to see how bad things will be. It won't be until May or June that the picture becomes clearer.
The uncertainty over the CVD case is sending shrimp prices higher, and that will continue at least through the start of the second quarter, says the CEO of one large shrimp supplier.
“The market is already moving and it’s going to continue to accelerate into the second quarter. For us to try to find shrimp now, for everybody, you’re paying at or above what you’re selling it for,” the CEO said. “The market is not long. Inventories, U.S. imports the second half of last year, dropped dramatically and so the U.S. inventory position is not nearly as strong as it was at this time last year.”
Prices in early February for farmed, raw P&D, tail-on white shrimp from Asia were around USD 4.25 a pound for 41-45s to USD 7.50 for 13-15s. P&D tail-off shrimp from Asia was running from USD 4.90 for 71-90s to USD 5.70 for 16-20s. Cooked tail-on whites from Asia were about USD 4 for 91-110s to USD 6.45 for 21-25s. Tail-off cooked shrimp from Asia were USD 4.35 for 71-90s to USD 5 for 31-40s.
Farmed, shell-on and headless whites from South America were about USD 2.80 for 81-90s to over USD 6 for 21-25s, and USD 3.25 to USD 6.15 for the same shrimp from Asia. Farmed head-on whites from South America were USD 2.50 for 70-80s to USD 3.15 for 40-50s. Easy-peel, farmed whites from Asia were USD 3.45 for 51-60s to more than USD 6 for 13-15s.
“Shrimp is available but it is under-supplied. Large sizes generally are OK for now, although more difficult to get,” the CEO said. “Middle-range or smaller have been generally under-supplied, so the inventory position there is much narrower. Replacement is there but it’s very expensive.”
China and Vietnam are buying large amounts of shrimp from Ecuador, and that is impacting worldwide trade flows, the CEO said. The one saving grace is continued strong exports from India. “India was a big success story and it continues to be. The forecast for India remains strong,” he said.
The success of India is not enough to balance skittishness from not knowing how the CVD case will be resolved. People are “shy” about importing shrimp on a cost-and-freight (C&F) basis because of the risk of not knowing if there will be penalties for importing C&F and whether they will be retroactive, the CEO said.
“There's no real way to work around it, either the exporter is going to get hit or the importer is going to get hit, there’s no real way around it,” the CEO says. “It's a legal entanglement now, lawyers are involved, the ITC is involved. You’ve just got to try to manage your way through it. It’s very similar to the anti-dumping duties, nobody knew and you just had to try to navigate through it and when it hit, it hit.”
