Last month, the UN’s Food and Agricultural Organization warned of “food price shock” this year, as commodity and fuel prices rise worldwide. As for shrimp, the shock has already set in.
It was a volatile year for shrimp prices in 2010, even more unstable than in 2008, when shrimp prices spiked in the summer due to increasing commodity and fuel costs only to crash in the fall thanks to the global financial meltdown.
The difference now is shrimp prices won’t come back to earth like they did in 2009. In fact, the relatively low shrimp prices experienced since 2003 are likely a thing of the past, according to one industry veteran.
“The years of cheap shrimp … are over,” he said. “Now it’s going to be a dogfight over supplies.”
The good news is supplies may increase this year. Indonesia and Mexico are recovering from the virus-related difficulties they encountered last year and are set to boost production this year, while India will continue to ramp up its Pacific white output as it shifts away from black tigers.
Through November, U.S. shrimp imports were still on track to exceed 2009’s total of 1.21 billion pounds, albeit slightly. Through the first 11 months of 2010, they were up 1.3 percent to 1.12 million pounds.
“We should see more equilibrium between production and demand,” said the industry veteran. “Value-added shrimp products will become more abundant, as packers continue to ramp up their efforts to shift more production from low-margin headless into higher-margin value-added products. This will improve turnover and [result in] higher margins for all in the supply chain.”
Any improvement in the U.S. economy, he added, will benefit demand for shrimp, most of which is consumed away from home.
But with the good news comes the bad news — emerging countries like China are importing and consuming more seafood, including shrimp, and a depreciating U.S. dollar isn’t making the situation any easier for U.S. buyers.
“The weak U.S. dollar is not going to help U.S. buyers compete with emerging countries for available supplies,” said the industry veteran. Since January 2010, the dollar has depreciated 10 percent against the Thai baht, he pointed out. Thailand is by far the No. 1 shrimp supplier to the U.S. market. Through November, shrimp imports from Thailand were up 5.8 percent to just over 400 million pounds.
By early January in the U.S. market, prices of Asian-raised Pacific whites had firmed and were expected to remain so into February. Raw, shell-on, head-off 16-20s were quoted in the mid- to high-USD 6 range, 21-25s in the mid- to high-USD 5 range, 26-30s in the mid- to high-USD 4 range, 31-35s in the high-USD 3 range and 36-40s in the mid- to high-USD 3 range.
