W29: Shrimp Update

In W29 in the shrimp landscape, Ecuador's National Aquaculture Division (CNA) reports that declining consumption, increasing transportation costs, and domestic insecurity have led to declining prices of whole shrimp. The average price of whole shrimp (HOSO) in Ecuador is USD 4.10/kg, a significant decrease from USD 5.50/kg in Q2-22. The Ecuadorian shrimp industry is encountering difficulties caused by the expansion of illegal shrimp farming, resulting in an oversupply. Additionally, the shrimp industry is facing challenges in terms of competitiveness due to rising operating costs, including labor costs and raw material prices, along with security concerns. As a result of these challenges, the industry has suffered significant losses, with estimates indicating a loss of over USD 1 billion for Ecuador's shrimp industry in 2023.

Shrimp exports from India declined by 13% from Jan-23 to May-23, leading to a significant drop in export earnings. The total value of Indian shrimp exports during this period was USD 1.8 billion. However, the overall shrimp exports reached an export volume of 148.2 thousand tons in Q1-23, which was 12% higher than in 2022. The shrimp industry faced challenges with low farm gate prices, but prices are expected to gradually recover due to increased demand from major importers.

Vietnam has become the world's second-largest shrimp supplier, contributing 13 to 14% to the global shrimp export value. The shrimp industry contributes 40 to 45% of seafood export value annually in Vietnam, with 2022 shrimp export turnover reaching USD 4.3 billion USD, an increase of 11.2% from 2021. Vietnam's shrimp exports have declined by 32% in the first six months of 2023, reaching a value of USD 1.5 billion. Several factors contributed to this decrease, including reduced market demand, declining supply and export prices, inflationary pressures, and increased competition from other shrimp suppliers. Despite the challenging conditions, shrimp farmers and businesses are optimistic and anticipate positive signals for shrimp production and export activities in the second half of 2023. In addition, Vietnam's shrimp exports to Japan dropped by 29% to USD 236 million, and to South Korea by 28% to USD 166 million in the first half of 2023. These numbers indicate the ongoing complexities in Vietnam's shrimp trade with these key Asian markets.

In Jun-23, Vietnamese shrimp exports value reached USD 328 million, showing a 21% decrease year-on-year (YoY). Additionally, Vietnamese shrimp exports to several smaller markets showed positive growth compared to the same period in 2022. Specifically, shrimp exports to Australia increased by 9%, while the United Kingdom (UK) experienced a 23% increase, Taiwan saw a 20% increase, and Switzerland recorded a remarkable 86% growth. These positive double-digit growth rates in these markets indicate a promising trend for the Vietnamese shrimp industry. Furthermore, the European Union (EU)'s imports of Vietnamese shrimp amounted to USD 193 million in the first half of 2023, a decline of 49% YoY. Notably, shrimp exports to the EU experienced a consecutive decrease of over 40% from Mar-23 to Jun-23, with no signs of improvement in the near term. This downturn in exports reflects the current challenges facing the Vietnamese shrimp industry in the European market.