US shrimp product prices have fallen sharply, will the Chinese market be affected?

    In the US market, the price of 41/50 deheaded shrimp fell from $3.50/lb before January to $3.00/lb, a 14% drop, the lowest price in three years (Urner Barry data). On the other hand, the price of raw shrimp in India is also falling in the US shrimp supply country: 60/kg white shrimp price fell from INR 330/kg to INR 285/kg in January (43 weeks to 47 weeks), a drop of 14% Other specifications of shrimp fell by 8-13%.

    40/kg fell 10% to INR 385/kg, 50 ended 8% to INR 330/kg, 70 fell 12% to INR 265/kg, 80 fell 11% to INR 240/kg, 90 fell 12 % to INR 220/kg, 100% down 13% to INR 200/kg.

The US industry has called on retailers to open shrimp product promotion and promotion activities to expand the market demand for white shrimp.

    “Thanksgiving (November 22) holiday has begun. We have heard that retailers want to promote, but they have never seen them act.” Mr. Jeff Sedacca, Vice President, Sunnyvale Seafoods, US subsidiary of Zhanjiang Guolian Aquatic Development Co., Ltd. Said, "In the past, whenever the holidays came, the merchants would promote the promotion. This year is an exception. I can understand their thinking of small profits but quick turnover, at least they can still make money now, but I believe that as long as the sales volume is weak, they will start to engage. Promotion."

An importer said, “From May to July this year, many merchants entered the market with low prices. When the inventory is sufficient, they first consider the marketing model of small profits but quick turnover. On the surface, the retail price of the US market and the cost of raw materials in India. The price linkage seems to be less tight, but the downward pressure on US prices will eventually affect India’s exports."

Will the price of shrimp still collapse?

Will the price of shrimp still fall like the first half of this year? Mr. Sedacca's answer gave the industry a reassurance.

   "Shrimp prices are certainly not going to collapse! The northern hemisphere is gradually entering the winter. There are not many shrimps in Vietnam and Thailand. Indonesia's inventory will bottom out at the end of January next year."

   "April to May this year, Indian shrimp prices plummeted, and many shrimp farmers are not willing to invest in seedlings, but this is only a short-term behavior. When they expect the price of shrimp to rise, they will all be farmed. The problem is that the seedling period is too Late, the winter temperatures in the northern regions have dropped, and the white shrimps cannot survive the winter, so they did not wait until the white shrimps reached the market size and began to collect shrimps, so that small and medium-sized Indian white shrimps were flooding the market,” Sedacca said.

   “The large-scale prawns that our company needs, the Indian market is relatively out of stock, so we generally import to Vietnam and Thailand,” Sedacca said.

   “In addition, India has built a lot of white shrimp processing plants this year. The shortage of raw materials is a serious problem. The processing plants compete for raw shrimp, which has stimulated the price increase. There are not so many raw shrimps on the market, and the processing plants pay higher costs. But failed to create more products, which ultimately led to an increase in the cost of all companies."

    This year, Indonesia's shrimp production will increase by 5-10% to 400,000 tons. “Indonesia’s shrimps are also well-fed this year, and many processing plants have been built. I feel that Asian shrimp processing plants are expanding faster than production. Adding processing plants is like opening a hotel. Although it can create demand, it must also be based on tourism. The scale of the industry is slowly developing, not blindly expanding."

Market expectations of the Dutch cooperative bank

Dutch cooperative bank analyst Gorjan Nikolik predicts that global P. vannamei and P. monodon production will exceed 3.5 million tons in 2018, and the trend of global prawns raw material prices will remain the "new normal" for a long time.

   “In the short to medium term, the price of shrimp may rebound. But in the long run, large-scale epidemic diseases will not break out in major producing areas, and prices will no longer be driven by supply, but by demand,” Nikolik said.