Market trends

US shrimp imports between January and April remained almost unchanged compared to the same period last year, reaching 162 007 tonnes worth US$ 1 105 million. During the first two months of 2007, imports were higher, but in March and April, they were below the level registered in 2006, resulting in almost unchanged total volumes for the four month period. However, the trend for different products was uneven. Import volumes for some product categories varied considerably, either positively or negatively. Meanwhile, the general trend for import unit values was negative. The downward import trend for March and April is not unusual, and can be expected to last at least until May, when the demand for shrimp recovers as the weather becomes warmer and people start eating out more.

Regarding the origin of imports, Thailand is, as usual, the main supplier, accounting for 31.5% of total imports in the period under review, with 51 000 tonnes. Following, but far behind, comes Ecuador with a 14% share (22 608 tonnes), China with 13% and Indonesia, dropping from second position last year to fourth this year, with 16 509 tonnes (10.2%). It is interesting to note the growth of Mexico as a supplier for the US market, surpassing Vietnam for the period under review, and appearing as an important player. But an important difference is that while Mexico sells mainly shell-on frozen shrimp, Vietnam sells more value added product, such as peeled frozen, “other frozen preparations” and breaded frozen, in more significant volumes than Mexico.

Imports from Thailand continue to grow, both in volume and value terms, reaching 51 000 tonnes worth US$ 343.8 million, +13.2% and +19.8% respectively. The biggest product category from Thailand is “other frozen preparations” which accounts for 37.7% of volumes and 38.1% of values. Second comes peeled frozen shrimp (30.5% and 32.5% respectively of imported volumes and values). Regarding Ecuadorian products, the most imported product category is by far frozen shell-on shrimp which accounts for 79.9% of imported volumes, and the 51/60 size is the top imported product if each size is considered as a different product category. China also increased its share in the US market in the period under review, from 10.8% in 2006 to 13% in 2007. From this country, the main product category was frozen breaded shrimp (60.3% of the volume traded) followed by “other frozen preparations” (26.9%) and peeled frozen shrimp (6%). It is interesting to note that what can be considered a product with relatively low value-addition (headless shell-on shrimp) accounts only for a small part of sales from China to the US market (4,5%). Indonesia, as another leading Asian supplier, also concentrates on products with more added value: peeled frozen shrimp is the most traded product, 53.6% of sales to the USA, and in third place, after 31/40 headless shell-on, with 13.8%, comes “other frozen preparations”.

As noted earlier, Mexico had a remarkable increase in its sales to the US market, +67.3% in terms of volume, but the products sold had a lower unit value than in 2006. As for Vietnam, it is important to note that although imports from this country went down both in volume and value (-26.2% and -16.2% respectively), the unit value of Vietnamese products grew by 13.5%. Indeed, Vietnam manages to obtain the highest unit value of sales to the US market among the main exporters, US$ 11.8/kg.


David vs. Goliath…

At the beginning of this year, the WTO ruled in favor of Ecuador stating that the method used by the US to calculate the dumping duty was illegal. Recently, the US Department of Commerce decided to eliminate the measure against Ecuadorian shrimp, so it will access the US market with zero duty again. It is worth noting that a duty below 2% is considered zero. The decision must be ratified on August. The US must ratify this decision or set a new duty, but using a new way of calculation to determine if there is dumping or not. The Ecuadorian government estimates that this miscalculation caused losses for more than US$ 65 million, of which more than US$ 4 million were legal representation costs.


Strong increase in imports of peeled and certain prepared shrimp products

Excepting some sizes of frozen shell-on shrimp, the best results in the first four months were shown by the “other frozen preparations”, import category which grew both in volume (+11.1%) and value (+7%), followed by peeled frozen shrimp which grew 4% in terms of volume and 8.9% in terms of value. The size grade showing one of the strongest growth rate was 21/25, +30% in terms of volume, and the other grade that did not experience a reduction was 51/60 which increased slightly in volume (+1.9%). All the other categories declined in volume terms, although some, such as peeled frozen and breaded frozen, managed to increase in value terms, suggesting higher average import prices for these categories.

Headless shell-on: This was the main imported category in the first four months of 2007, accounting for 40% of total imports. However, imported volumes and values went down, from 69 098 tonnes worth US$ 487.6 million in 2006 to 64 847 tonnes worth US$ 435.9 million, a reduction of 6.2% and 10.6% respectively. The most important size grade was 31/40, with 11 427 tonnes worth US$ 67.5 million. This size, like most of the others, declined both in volume and value (-8.1% and -12.4% respectively). The main suppliers of 31/40 were, with similar market shares, Ecuador, Thailand and Indonesia. The size grade showing the strongest growth rate during the period was 21/25, which grew 30% in volume and 18.1% in value terms, as noted earlier. Also, this shows that this size could not escape from the downward unit value trend. The increase in sales was due to a 79.4% growth in sales from Mexico, the main supplier, and a 248.1% increase in sales from Thailand, the second supplier. This also shows a high supplier concentration in sales of this size. The highest unit value was obtained by the biggest sizes, <15, but it also was lower than in the same period last year. The overall main supplier of headless shell-on shrimp is Ecuador, although it concentrates its main sales in some sizes, while Thailand manages to appear as an important player in almost every size category.

Peeled frozen: In the period under review, this was the second most important product category, reaching 47 051 tonnes worth US$ 435.9 million, and was one of the few categories which had a positive variation compared to the same period last year. The main supplier was Thailand with 33% of total imported volumes, followed by Indonesia (18.8%) and Vietnam (9.2%). The share of this product category in terms of total imports remained almost unchanged between the two periods under comparison, 28% in 2006 and 29% in 2007. It should be noted that unit values in this category also increased, +3.7%.

Other frozen preparations: This category showed the best growth performance in the first third of 2007, and was also the third most imported product. Up to April 2007, 32 199 tonnes were imported worth US$ 218 million, higher in both terms compared to 2006, but unit values decreased by 3.7% . The main supplier for this category was Thailand with a 59.7% share, followed by China with 17.7%.

Breaded frozen: The increase in unit values is worth noting in this category. The value of the category increased by 4.9% while volumes declined by 1.7%. The supply origin for the category is also highly concentrated, 79.6% of imports come from China, and 14.8% from Thailand.

Other products: This category covers a wide range of products and the import trends for the different products were uneven for the months reviewed. The strongest growth was in the category of peeled fresh, dried, salted or in brine shrimp, which grew 28.4% in terms of volume and 4.9% in terms of value, implying a unit value decline of 18.3%. Canned shrimp imports remained almost unchanged in volume terms, and grew 7.4% in terms of volume implying a 7.3% increase in unit values. Meanwhile, a strong unit value increase is evident in the shell-on fresh, dried, salted or in brine shrimp category, +37.8%, resulting from a 3.6% fall in values and a 30% volume reduction. Supplies of these products, as it can be seen in the chart, come mainly from Asia, but some Latin American countries manage to obtain a niche in the fresh market.

As for the total supply in the US market (estimated as the addition of total imports plus total domestic landings), for the first four months of the current year, it was lower than in the same period in 2006, mainly as a result of the reduction in landings, given that imported volume remained almost unchanged.

Regarding price levels, which recently saw a recovery, for white gulf shrimp, a new increase could be observed in June. Meanwhile, for brown gulf shrimp, a new reduction in prices was observed as can be seen in the accompanying graph. This could be a result either of the existence of excess shrimp supplies, or a fall in demand, according to some operators


Outlook

With the beginning of the spring, restaurant sales are seasonally higher. It has also been reported that the consumption of higher value food products, including shrimp, has increased. At the same time, the increase in fuel costs for consumers, which in some states reached 50%, might have a negative impact on consumer purchasing power.

Capture products from Central America have started to arrive, and prices for these products are historically low. In addition, given that the EU has strengthened its measures regarding quality, and that there has been news about quality problems, antibiotic residues and mislabeling in Vietnamese and Chinese shrimp, some observers foresee an increase in Asian white shrimp supply to the US market.

by Javier López (INFOPESCA)
© FAO GLOBEFISH 2007