W31: Shrimp Update

In W31 in the shrimp landscape, the Ecuadorian shrimp export volume increased by 13% in May-23, reaching 107.4 thousand tons, and the overall export volume for the first five months of 2023 increased by 19% year-on-year (YoY). The cumulative shrimp export value was USD 2.72 billion, similar to last year. China continues to be Ecuador's largest market for shrimp exports. In May-23, Ecuador's shrimp export volume to China reached 68.4 thousand tons, a 40% YoY increase. However, the export volume to the United States (US) experienced a decrease of 15% YoY, reaching 15.4 thousand tons. Similarly, Ecuador's export volume to Spain, the largest market in Europe, was 4.2 thousand tons, a decrease of 35% YoY. These figures indicate fluctuations in export volumes to different foreign markets during the period mentioned. The average export price of Ecuadorian shrimp was USD 5.34/kg, which experienced a 17% YoY decrease and a 17% month-on-month (MoM) decline. In China, the average export price of Ecuadorian shrimp was USD 5.11/kg, showing an 18% YoY decrease. Meanwhile, the export price to the United States was USD 6.17/kg, a 14% YoY decrease.

Rabobank predicts that China's shrimp market will face challenges in the second half of 2023 due to weak global demand and intensified El Niño phenomenon. Inflation issues in Europe and the US and high fishmeal and oil prices will also impact China's aquaculture industry. Additionally, slow demand recovery will further exacerbate the situation. China imported over 500 thousand tons of frozen warm-water shrimp in the first half of 2023, marking a 49% YoY increase, and the import value was about USD 2.84 billion, a 29% YoY increase. The import growth in China's shrimp market is expected to decline in the second half of 2023. Asian countries, particularly India, are expected to face reduced shrimp production, possibly reaching up to 20%. On the other hand, Ecuador's production growth rate will increase to 16 to 18% YoY, contributing to global oversupply and putting pressure on Asian countries. These factors collectively indicate a challenging market environment for China's shrimp industry in the coming months.

In the US, Louisiana fishermen face a challenge as the demand for imported shrimp products surpasses the domestic market demand. In response, they urged Congress to protect their industry from these imports. The state legislature approved a bill providing tax breaks for commercial fishermen. Tommy's Seafood, a notable company in the US, obtained Global Food Safety Initiative certification. However, the increasing influx of imported products and fishing boats is increasing operating costs, leading to a decline in seafood practitioners in Louisiana. This highlights the challenges the local fishing industry faces in balancing the demand for imported products and sustaining their operations.