GENERAL TREND

During the period January-September 2007, combined shrimp imports for the EU, the USA and Japan decreased slightly compared to the same period in 2006. Within this group, the EU was not only the major market with 439 000 tonnes imported (extra-EU imports only) but was also the only market in expansion. All European markets (excluding the UK) continued to grow and to consolidate. The European shrimp market was largely influenced by the US shrimp market situation. Indeed, key exporting countries to the USA such as Thailand, Indonesia, Ecuador, encountered more difficulties in exporting to this country due to the devaluation of the dollar, the slower US economy and anti-dumping tariffs. Therefore, they looked for new opportunities in other markets and turned mainly to Europe where the situation is more appealing.

Thailand is the most striking example of this situation. Thailand became the top supplier to Germany, multiplying three fold its exports to this market in one year and it also doubled its exports to the UK. Ecuador, one of the booming exporters on the EU market consolidated its number one position in Italy, registered a 40% increase in the French market and developed on the Spanish market with a 9% increase of its exports. Indonesia also expanded its exports to the EU market and more particularly found a niche in the UK market. China continued to gain market share in Spain. Argentina, thanks to very good landings of Pleoticus muelleri during the first three quarters of 2007, expanded notably on the Spanish market where it retrieved its position as number one supplier. It also doubled its volumes exported to the Italian market. India had more difficulties on the UK market, where it remained first supplier but with a 10% decrease. Black tiger (number one species in India) is loosing in popularity in some world markets and has difficulties in competing with the cheaper Penaeus vannamei which is produced extensively in other Asia countries. However, despite this gloomy situation, India increased by 15% its exports to France. Brazil continued to show signs of weakness and registered a 20% decrease on the French market during the January-September 2007 period compared to 2006. French annual statistics for 2007 show that Brazil has been overtaken by Ecuador as top supplier. On the Spanish market Brazil represented only 4% of total imports, in contrast to the highs of previous years in this market.


SPAIN – ARGENTINA RECOVERED ITS TRADITIONAL POSITION OF FIRST SUPPLIER TO SPAIN

During the third quarter of 2007, shrimp volumes imported by Spain continued to expand and reached a record high level with 122 000 tonnes. However, in terms of value, shrimp imports showed the opposite trend and declined by 10%. Indeed, shrimp products entered the Spanish market at an average unit value as low as €4.86/kg, corresponding to a drop of 0.80 cents on the average unit value of the past five years.

The period under survey was characterized by the Argentina recovery of its top position among shrimp suppliers to Spain. During years of gradual lower availability (2003-2005) of Pleoticus muelleri, Argentina had lost ground on the Spanish market, at the beginning to the benefit of Brazil and Ecuador and later to the benefit of China (from 2005). In Jan-Sep 2007, Argentine shrimp exports to Spain almost reached 2002 levels with

24 992 tonnes and the country regained its historical predominant market share (+86% on 2006 figures). The cause behind the very low unit value in the Spanish market was large volumes of low cost products from Argentina coupled with the general slump in shrimp prices. Although imports in Jan-Sep 2007 were almost equal to 2002 figures, unit values for Argentine products were at €5.09/kg against €7.36/kg in 2002; it also correspondents to half the average unit value for 2005 (€10.54/kg) when availability was at its lowest level. Argentina shrimp catches were expected to be at record high levels in 2007 but they did not live up to expectations. Indeed, landings were extremely high up to September but the last three months were disappointing. According to SAGPyA (Secretaría de Agricultura, Ganadería, Pesca y Alimentos), total annual Argentine shrimp catches for 2007 amounted to 46 400 tonnes (provisional figures) representing a 4% increase only on 2006 figures.

During the period under review, China lost its position of first supplier to Spain but continued to see its shrimp exports to this country increase slightly (19 210 tonnes in Jan-Sep 07). Following difficult years due to the EU ban, China emerged on the Spanish market in 2005 to constantly strengthen its position in recent years.

Ecuador, one of major emerging countries on the EU market due to the unfavourable US situation, continued to increase its market share on the Spanish market thanks to a 9% increase on 2006 figures.

FRANCE – RECORD-LOW UNIT VALUE ON THE FRENCH MARKET

During the third quarter of 2007, French shrimp imports continued to increase in terms of volume - at a 4% growth rate compared to the same period in 2006 – but started to decrease in terms of value with a 3% drop compared to 2006. Total shrimp imports for all categories combined amounted to 74 790 tonnes. The average unit value on the French market was equal to €4.99/kg which was the lowest level for the past 6 years. The decrease is not the fact of a single country but is due to the world depression of shrimp prices. Brazil and Ecuador continued to share the lead on the French market, with 15% and 14% market share respectively. However, these two countries showed contrasting trends during the period under survey. Brazil experienced a 20% decrease on 2006 figures, whereas Ecuador registered a 40% increase of its exports to France.

The average unit value of Penaeus vannamei from Brazil was €3.10/kg and remained more competitive than products from Ecuador at € 3.68/kg. Penaeus vannamei offered on the French retail market has various origins (sample promotional prices include: 40-60pc/kg €7.50/kg - 80-100pc/kg €6.50/kg from Brazil, Ecuador, Guatemala and Venezuela; 80-100pc/kg €4.94/kg from Colombia).

India, third supplier to France, increased by 15% the volume of its exports, followed by Madagascar which experienced a further decrease with -4%. During the period under survey, the French market for coldwater shrimp was on a downward trend. All major supplying countries saw the volume of their exports decrease significantly compared to 2006: Netherlands ( 11%), Belgium (-9%), Denmark (-21%).

UK – THAILAND DOUBLED ITS SHRIMP EXPORTS TO THE UK

During the third quarter of 2007, UK continued to register a fall in its shrimp imports (-3% in volume and -5% in value), although the gap with previous years was less striking than at the beginning of the year. Imports of frozen products were stable and corresponded to almost 48% of total imports (29 550 tonnes). The situation was more cloudy for the processed category which decreased by 6% (31 200 tonnes). Processed products in the UK being mainly coldwater shrimp species, the drop in supply in this category was mainly due to lower availability from key partner countries. Iceland the number one exporter to the UK with almost 20% market share (11 590 tonnes), decreased by 9% the volume of its exports during the period Jan-Sep 2007 compared to the same period in 2006. Denmark, which holds the third rank among UK shrimp suppliers, followed the same trend with a 13% decrease, so did Canada (-10%) not to mention Norway which experienced a drastic 40% drop.

Coldwater shrimp corresponded to only 45% of total imports during the Jan-Sep 2007. This represents a 16% drop on 2006 figures and an important change in the traditional pattern of UK shrimp imports.

Among warmwater shrimp exporters, India (number two supplier to the UK) reduced its exports to this country from 8 400 tonnes in Jan-Sep 2006 to 7 500 tonnes Jan-Sep 2007 (-10%). Indonesia was able to benefit from this situation and increased by 20% its exports to the UK. However, the most striking phenomenon was the boom in Thai shrimp exports to the UK. Volumes of Thai origin doubled compared to 2006, with almost 6 000 tonnes. Thailand is a newly emerging country on the UK market and this trend may be confirmed and enhanced in the coming months. The number one importing country for Thai shrimp products is the USA (61% of its shrimp exports in 2006) and the UK may be becoming a good subsidiary market to compensate for weak export figures to this market.


ITALY – ARGENTINA REGAINED GROUND ON THE ITALIAN MARKET

Similarly to almost all European countries, Italy saw its shrimp imports increase during the third quarter of 2007 (+3%) but with products of lower value (-10%). Total shrimp imports amounted to 50 243 tonnes with Ecuadorian products representing 30% of the total. However, the increase in Ecuadorian exports on the Italian market weakened during this period (-1% in volume and -17% in value). Ecuadorian shrimp production and sales registered a major growth in recent years. Although the USA is the first market for Ecuadorian exports, it seems that many farmers prefer to sell their productS to the EU. Argentina clearly regained ground on the Italian market thanks to growing availability of Pleoticus muelleri and its exports to this market more than doubled. Spain, re-exporter of Argentine products, followed the same trend and recorded a 64% increase.


GERMANY – BOOM OF IMPORTS FROM THAILAND ON THE GERMAN MARKET

German shrimp imports continued to expand at a soaring growth rate (+ 31% compared to 2006). Contrary to other European importing countries, imports in terms of value followed the same trend and the average unit value remained stable on the German market. Unit value for frozen products were generally slightly down but were balanced by processed product unit value for which the trend was slightly up.

With an 18% market share (6 340 tonnes), Thailand took the first position among top suppliers to Germany during the third quarter of 2007, leaving India in second position. Thailand multiplied three fold the volume of its shrimp exports to Germany in only one year, and products offered on this market (€5.99/kg in 2007 against €6.53/kg in 2006) did not really reflect the price slump faced by Thailand. Despite the predominance of Thailand, India did not loose ground on the German market and increased by 26% its shrimp exports to this country. As in the case of Thailand, India had to find new markets to balance very low export figures to the USA due to the rising rupee against the dollar and to US anti-dumping duties. All exporting countries – with no exception - showed a positive development on the German market. Netherlands – third supplier – increased by 13% the volume of its exports to Germany (mainly re-exports of processed products) and Vietnam had a 10% increase.

The EU market picture is slightly modified with the strengthening position of exporters which are traditionally suppliers to the USA. This trend is expected to continue and to be enhanced in future. A general trend may also emerge for world producers to offer higher quality products and to reduce quantities, in order to put an end to the present price weakness. For example, in this context of over production, the aim of Thai shrimp farmers would be to reduce shrimp production by 20% in 2008. Thailand, Ecuador and China have recently made efforts to develop the production of organic shrimp and environmentally friendly techniques. Producers are also encouraged to export more value added products. On the other hand production costs are expected to increase in 2008 due to rising oil prices.

Report prepared by Karine Boisset
© FAO GLOBEFISH 2007