With the Chinese New Year holiday period over and coronavirus still spreading in the country, the global farmed shrimp industry is still uncertain of what is to come in the following months.
However, it seems shrimp prices may be about to drop substantially in the next few days, various industry sources told Undercurrent News.
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“Ecuador is about to collapse and prices will substantially go down next week. Some companies are no longer exporting shrimp to China at the moment, [and are] opening new markets and exporting mainly to the EU," one EU source close to the Ecuadorian sector told Undercurrent. "Before the New Year, things were already difficult for Ecuador. The market suffered a lot, because of the Chinese shrimp bans, but now the situation is far worse."
China imposed a temporary ban in September 2019 on several large Ecuadorian companies, due to the alleged presence of shrimp diseases including the whitespot and yellow head viruses. The ban was removed at the end of November.
“We expect China could close the borders completely at any time now. Ecuadorian shrimp exporters are now harvesting every day to free up space in the ponds, knowing that, if the Chinese borders finally close, the product will get stuck in the sea or in their plants," the EU importer said.
Over half of Ecuadorian shrimp (see charts below, from the recent Global Seafood Market Conference) is sent directly to China and about 80% of the Latin American shrimp plants export to the Asian country, which means the situation could end in disaster, according to the source. "If the situation continues this way, it would entail a huge downturn for the Ecuadorian shrimp industry," the source added.
As it is, it seems shrimp market prices have already started to fall in India, "very fast due to the ongoing issues with coronavirus in China", according to Sea Gem Aqua Farms' owner Durai Murugan. He advised all shrimp farmers through his LinkedIn account to delay stocking and to harvest immediately if they are planning to soon.
According to Murugan, "30 Indian rupee ($0.42) have fallen within one day", he posted on Feb. 6.
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Two shrimp importers in Spain shared with Undercurrent their views on how the coronavirus alert is leading the industry to a "dangerous situation characterized by high market volatility".
“As soon as the Ecuadorian exporters see the slightest hint that everything could return to normal, prices will abruptly rise,” the first Spanish source commented.
The market has all its focus on the current development of events and “what is coming next will depend on how long the alert lasts”, the second Spanish source said. “The industry is now living a time of great uncertainty and it seems hard to bet on prices going up."
“It is a matter of demand, however. Demand in China is the big unknown challenging the industry now, regardless of what happens with the virus. There is not an actual risk of coronavirus affecting shrimp so the focus may be on the impact this situation has on the Chinese economy and the country's demand for this specific product," he said.
Sources also told Undercurrent that large companies -- declining to name which -- could be pushing Latin American shrimp exporters to close one-year contracts, when all they really want to do now is sell the same volume they were exporting to China to other markets almost instantly. "Which is impossible. It is such a large volume that all other Ecuadorian shrimp importers such as the US and the EU will never be able to assume."
"I don't think establishing long-term contracts is a good idea at the moment, however. Prices are expected to decrease significantly and will make absolutely no sense," the second Spanish source pointed out.
2020-02-07 09:54:00Z
https://www.undercurrentnews.com/2020/02/07/farmed-shrimp-prices-set-to-drop-substantially-eu-importers-keeping-an-eye-on-coronavirus/
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