US Import Value of Frozen Shrimp in Jan-Feb 2023 Drops to 4-Year Low as Prices Plunge

The value of US imports of frozen shrimp and prawn (HS Code 030617) during January-February 2023 fell 27% year-over-year to its lowest level for the same period in four years.

Source: Tridge and USDA

The drop comes on the back of a decline in both the average price and imported volume. The average price dropped 16% year-over-year to USD 7.94/kg, its lowest level since at least 2018.

Source: Tridge and USDA

Meanwhile, the imported quantity of this product dropped 13% year-over-year to 93.9 thousand mt. Yet, the fall in imported volume during Jan-Feb 2023 is a result of the abnormally large amount of imports during early 2022. Last year, the monthly import volume during the six months was considerably higher than the five-year average, as suppliers foresaw a great increase in demand as the Covid-19 pandemic restrictions were being lifted. Nonetheless, as inflation started to affect consumers and the market became oversupplied, imports declined. In H2 2022, imports dropped considerably below the five-year average, as buyers still had ample inventories. While it is still early to call for a recovery in demand, imports during Jan-Feb 2023 erased that trend and actually came slightly above the 2018-2022 average. This could signal demand for overseas shrimp is getting better. In consequence, this would mean that the multi-year low prices during the first months of 2023 are not the result of lower demand relative to the previous years.

Source: Tridge and USDA

Lower prices are mainly the result of an increasing global production and increasing competition among origins. In Jan-Feb 2023, India continued to supply the bulk of US frozen shrimp imports, with a 38% market share in both value and volume. However, Ecuador, the second largest origin, has continued to gain ground over the years and has closed the gap with India. In terms of value, Ecuador has 28% of the market, and in terms of volume it has now 35% of the market. Ecuador has a higher share in volume compared to value as the average price of shrimp imported from this origin is the lowest compared to other major origins. This has also caused imports from Ecuador to continue increasing; and an increasing share of cheaper imports has led to a decline in the average US import price. However, import prices from India, Indonesia, and Mexico, the other three largest suppliers, have also declined year-over-year in these early months of 2023, underlining production growth and a struggle for more competitive prices to export. A general easing in some input costs has also led to the price drop.

Source: Tridge and USDA

In the upcoming months up to June, it’s likely that US imports of this product will remain below last year’s abnormally large numbers, but slightly above the previous five-years’ average. The multi-year low prices could further boost demand. Increasing exports from Ecuador, which has had cheaper export prices relative to other origins for some time now, could also help to keep domestic prices in check and help boost US demand. Nonetheless, as there are cheaper protein alternatives in the market, further demand downside can't be ruled out if consumers face more economic turmoil.