Shrimping and Saving – A 12 month Review

Spend Matters welcomes this guest post by Mark Kozlowski of Mintec.

The last few years have been very turbulent for the global shrimp industry. We have experienced disease, low production and a rebalancing of supply and demand.

In June 2013 we wrote about how global shrimp production fell sharply as a result of a disease then known as Early Mortality Syndrome (EMS). EMS is a disease that usually affects newly stocked ponds where it leads to widespread losses within 30 days of stocking. EMS has now been renamed Necrotising hepatopancreatitis (NHP) since scientists have discovered what was the cause of the early death.

Mintec

Shrimps are big business in the US. In 2013, shrimp imports to the US accounted for nearly a quarter of the total volume of all seafood imported. As the US imports roughly 90% of the shrimp it consumes, what happens in other parts of the world is especially significant.

Thailand, the largest supplier of shrimps to the US in 2012, was the producing country hardest hit by NHP. Production there fell by 50% in a year to just 250,000 tonnes in 2013, and the drop in production is expected to continue for the rest of 2014. The shortage in Thailand led the US to look for new producing countries to source their shrimp. Even so, the globally tight supplies in 2013 led prices to rise across the world.

In 2013, India overtook Thailand to become the largest supplier of shrimp to the US because the country was unscathed by the NHP outbreak. During 2014, global shrimp production started to rebound with production in some countries actually expected to increase on the previous year.

However, production in Thailand is expected to continue to be affected. Unfortunately for Thailand, this has led those countries, namely Indonesia, Ecuador and Vietnam, to all gain higher shares of the US export market, meaning that Thailand has now slipped to fifth largest importer to the US.

The higher availability of shrimp globally has resulted in a recent fall in prices, down 16% since January. The high prices also sparked a drop in demand, allowing for a rebalancing of supply and demand, accelerating the decrease in prices. In the next few years, shrimp production is expected to continue to rise, which should lead to further price falls. However, production is not expected to get back to the levels prior to NHP until 2016.

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