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Shrimp Market Update

March 26, 2010 Overview: Last month’s shrimp imports were down 1.5% and YTD imports are down by 1.5%. Last month’s raw shell-on imports were -14% for black tigers and +10% for white shrimp. Imports of raw peeled shrimp were -12% for black tigers and +16% for white shrimp. Cooked shrimp imports were -13%, coldwater were -26% and breaded +28%. The strongest import volume YTD has come from Thailand (-2.0%), Indonesia (-23.0%) and Ecuador (+17.8%). China (+25.9%), Vietnam (-1.5%) and Mexico (-8.4%) round out the top six. Most importantly, Indonesian imports have continued their downward trend from the end of 2009 indicating continued production problems. Vietnamese imports also continued a slightly downward trend. After an increase in 2009, Ecuador imports continue strong and Chinese imports were up with increased breaded imports. The struggling world economy, reduced production in certain regions, tariffs and deteriorating consumer confidence all continue to impact the global shrimp industry.

Black Tiger: In Vietnam, it is off-season until June and supplies remain extremely tight due to the current raw material shortage. In particular, 16/20 count shrimp and larger are facing critical shortages, with 13/15 count especially tight. The raw material shortages are expected to last until the next season begins and the forecast is that prices will not decrease as much as they have in the past on larger sizes. Seafood firms in the Mekong Delta region will continue to face shortages and many factories are now running at just 20-40% capacity. One reason for the shortage is that prices on small size shrimp increased, which encouraged local farmers to sell and start a second crop sooner than usual. Additionally, unfavorable weather caused much of the shrimp crop to die en mass. The situation is expected to get worse and many firms are considering importing shrimp from Thailand or Indonesia. Overall, Vietnam earned $4.2 billion in seafood exports in 2009, down 6.7% from prior year due to drops in the export value of its three biggest importers—the EU (-5.7%), Japan (-8.4%) and the US (-3.9%). Frozen shrimp exports totaled over $1.5 billion in 2009 and were the only seafood export that managed to grow amid the global economic 1

the rapid growth and strong productivity of 2 . Additionally. This trend is expected to continue in 2010 and the strength of the Thai baht remains a major concern.crisis.37 billion. Currently. Many farmers oppose the plan because they fear the shrimp price would be controlled by imported shrimp and are afraid of antibiotics contamination. exporters facing supply shortages are unable to meet up to 30% of the shrimp orders received. the combination of several factors--the strong baht and decreasing shrimp harvest volumes--continue to drive prices up gradually. shrimp export volumes are estimated to hit US $1. Vietnam is now starting to raise more white shrimp with a goal of becoming the regional shrimp processing hub within a few years. it may be good for Thailand to have a second product line (black tiger shrimp) to maintain export competitiveness. Therefore. Overall. +9. In Indonesia. which has now become a staple and is expected to triple in 2010. In 2004. White Shrimp: In Thailand. The factors that may impact production and pricing include supply volatility due to diseases and weather conditions as well as production costs. The fall in black tiger shrimp was primarily due to white-spot disease. the Bangladesh government halted exports as a preemptive measure to avoid any sanctions by the EU. from 50K tons to 150K tons. Then. Due to the expected rise in demand for shrimp products and a production volume of about the same as 2009. export targets are set at $1. Another strategy Thai farmers are considering is to increase black tiger shrimp volumes to grow export value and help remain competitive in the world market. Under an income guarantee plan. shrimp farmers are calling on the government to replace the price-pledging scheme with an income guarantee program like it did for other agricultural products. After the detection. up 5% from 2008 levels.5 billion. the government would assess the income and produce yield for farmers based on a reference price and compensate farmers for any shortfall in earnings once they sell their product on the market. One change is shrimp exports is the gradual increase in Penaeus vannamei. Thailand’s shrimp industry should improve in 2010 with better economic conditions. black tiger shrimp comprised 85% of Thailand’s export volume at 200K tons but plunged to just 5K tons in 2008 and then 2K tons in 2009. prices are anticipated to rise about 10%. shrimp imports to the EU have resumed after a six-month hiatus due to the detection of antibiotic residue in January 2009. In Bangladesh. higher purchasing power and the likelihood of a higher demand for shrimp. Bangladesh has resumed exports after taking measures to make the shrimp nitrofuran-free.5% over 2009 levels. In 2010. The government plan is to open a shrimp import pipeline for processors and re-shippers. In 2009.

especially with sizes 21/25 and larger. U. Over the last 5 years. the major channel for coldwater shrimp in the US. seafood sales grew by 7% in supermarkets. The embargo will begin on April 20. However. reduced supplies and low prices. This means the 2010 cumulative totals are 30% below the same period last year.S.foodsafety. They will require re-inspection but due to the seasonality. Also. January headless weight was 3. fish tacos and all in one seafood steam Globefish Intrafish Urner Barry 3 .gov puts food related information from all federal agencies in one place.S. omission or acts of reliance thereon. Sources: Contessa Procurement Team National Oceanic and Atmospheric Association National Fisheries Institute National Marine Fisheries Service Seafood. trends show more use of raw fish. Inspectors found some Mexican shrimp vessels were not using the required Turtle Excluder Seafoodsource. Consumption Insights—Perishables Group: A report shows that 82% of consumers bought more seafood products in 2009 because they are trying to eat healthier. marked by weak demand. The industry has been hard hit by declining US Foodservice sales. State Department has decided to decertify Mexico under the regulations that require all wild shrimp imports to comply with Seafoodnewssource. Officials had warned farmers to study the market properly to avoid business risks and a price slump due to oversupply.5%.white shrimp led farmers to abandon black tiger shrimp in favor of the more lucrative white shrimp. Food Safety Update: The Obama administration is rolling out a new web site designed to streamline food safety information for consumers. A tough global economic climate and a depreciated Canadian dollar have resulted in unfavorable returns for Canadian shrimpers but favorable prices for seafood buyers worldwide. DISCLAIMER: This report is intended for informational purposes only. that may not occur until the fall. Reports indicate wild Mexican shrimp production is limited. The new site– www. The market is steady with some higher prices noted on larger sizes as replacement becomes increasingly difficult.S. From 2008 to 2009. turtle protection requirements. the switch to vannamei shrimp is a perfect case study in the mismanagement of demand and supply. Northern Shrimp – Canada’s coldwater shrimp (Pandalus borealis) industry had a difficult year in 2009. including recall and contamination alerts and tips on how to safely handle food. which could disrupt some exports. 2010. Additionally.4 million pounds. whole fish. So far in 2010. Gulf / Wild Mexican Shrimp: The National Marine Fisheries Service reported that US Gulf landings continue to run well above last year. the average price of 60-70count head-on shrimp has steadily fallen from 122 baht/kg to 98 baht/kg (-20%).8 million pounds from January 2009. the U. One troubling sign is that there is a gap in the demographics showing 40% of shoppers aged 65 or older want to eat more seafood but only 16% of shoppers 18 to 24 years old want to eat more. coldwater imports from Canada are down 25. Contessa is not liable for any error. below the 4.