We’ve yet to see the full impact of higher shrimp prices on consumers, as supplies remain tight, prices stay high and buyers keep waiting for a solution to the early mortality syndrome (EMS) disease in Thailand. The CEO of one East Coast seafood supplier says the situation is “still a mess” with “not too many lights at the end of the tunnel.”
“Many items are priced out of the market,” the CEO said, adding wild Mexican shrimp prices are too high to the point he can’t buy it and make a profit. Beyond that, supply is tight, even for those willing to pay for it.
“In the past, when prices were high, you could get it if you were willing to pay,” he said. “Now, you can’t be sure to get the shrimp.”
Restaurants that absorbed the higher prices last year during the first few months of this episode now are passing those increases on to their customers, and are finding creative ways to keep shrimp on the menu if they choose to keep it on at all.
“Instead of just selling shrimp, they are switching to shrimp and pasta dishes, using it as an accent rather than a full meal,” the executive said.
Prices for shell-on, headless, easy-peel white shrimp out of Asia in early February were in the low-USD 5 (EUR 3.60) range for smaller sizes to more than USD 9 (EUR 6.49) a pound for 21-25s that were selling in the mid-USD 8 (EUR 5.77) range in October.
Raw, peeled and deveined tail-on whites farmed in Asia range from the mid-USD 6s (EUR 4.33) for 41-50s to more than USD 13.50 (EUR 9.73) for 13-15s. Shell-on, headless farmed shrimp from Central and South America were around USD 4 (EUR 2.88) for 81-90s to more than USD 8 for 21-25s.
Premium No. 1 wild whites from Mexico are topping out at over USD 14.50 (EUR 10.45) a pound for U-10s, while No. 1 browns were going in the low-USD 12 (EUR 8.65) range for U-12s.
The full effect of the higher prices from last fall just are starting to be seen now, as retailers that booked orders in the spring of 2013 work down to the end of those inventories. They’re now find themselves having to strike a balance between the higher prices they paid for shipments in the fall with just how much their customers will pay before buying something else, says the CEO of a U.S shrimp supplier. While the holidays masked some of the weakness in the market, as consumers bought and ordered shrimp for Christmas and New Year’s, the true impact will be felt in the next three months, he said.
“We already know what it has done on supply, it’s easy to see supply is shorter and prices are very high,” the CEO said. “But we haven’t really seen the effects on the consumer or end user. Supply remains short, particularly in the big sizes and the small sizes, but the middle sizes are weak. At the large sizes there is no shrimp supply, and small — whatever there is — prices are really high. The supply side will stay challenged until April, May when more supply will come online, but we’re just seeing the demand effects. Demand is down, the dollars are good but tonnage is declining and will continue to weaken. That’s where we’ll get to some level of rebalancing.”
Summertime should be a good barometer for how this plays out, as there should be more product, the CEO said. “The Thailand recovery doesn’t look all that great but as long as production in other areas remains good and consistent with what we’ve seen I think we’ll see better prices,” he said.
March 7, 2014
