Shrimp prices have shot up 7.5% in global markets since the start of January as traders brace for lower supply in 2015.
Shrimp prices are on the rise this month in response to a global supply shortage with production in Maine, Canada and Greenland on the decline. Other major producing countries also report lower output in this year.
In early week trading prices for 150/250 count shrimp ticked up over 6.5% from last week to $ 7.20 per pound, a five-year-high. Since the start of the month prices for cold water shrimp are up nearly 7.5% or $ 0.50 per pound. This sharp rise is due to expectation of a serious shortfall in production in this year.
Farmers of Vietnam are now worried about slow and stunted growth of shrimp in this season. For the last couple of years the country had suffered a serious attack of Early Mortality Syndrome [EMS] that affected production and export volume heavily. In order to meet export commitments Vietnam had imported roughly US $ 1 billion worth shrimp from India.
The shrimp farming industry there, has not developed a strategy to deal with diseases and still relies on antibiotics to protect its investment. So according to reports production is likely to be lower in this year also, that will badly affect the global supply of the product. United States, Japan and the European Union [EU] are the major markets for Vietnam’s shrimp. Vietnam expects to sign a free trade agreement with the European Union very soon, which will eliminate tariffs on its shrimp exports.
In India too, production is in rough weathers in this season and for the last couple of months supply is very limited both from the sea catch and from aqua culture farms. Anwar Hashim, a top exporter and former president of the Seafood Exporters Association of India [SEAI] told Business Standard that Vannamei production had been affected badly this time and supply crunch is obvious in Andhra Pradesh and Tamil Nadu. There is also drop in sea catch also and this naturally build up pressure on the price line. There is an average increase of 10-15% in prices in local markets during last three months.
Global demand is picking up now, especially in the Euro zone, but US market is still dull, he said. The production is not matching with the demand as of now, So there is a chance for further increase in the prices in the global trade, he added.
According to reports in Asia, farmed shrimp production is likely to decrease in the coming months. Industry reports from Thailand indicate less than 200,000 tones of production for 2014-15, which is lower than the earlier forecast of 250,000 tones.