Continued increase in US shrimp imports while Japanese shrimp markets picks up:

During the first 10 months of 2003, US volume shrimp imports increased by 20 % compared to the same period of last year. At 407 200 TM, imports were a record level for a January - October period. In value terms, US shrimp imports increased just 15 %, reflecting weaker average prices. For the month of October, shrimp imports amounted 59 100 TM, 36 % above October 2002 levels. This is a new monthly record for US shrimp imports.

Attention is currently focused on 2 issues: the application of new measures against bio-terrorism to be imposed by the FDA, and the presentation, by the Southern Shrimp Alliance, of an anti-dumping lawsuit against numerous foreigner shrimp suppliers. There is still considerable uncertainty regarding the impact of these initiatives. A more complete picture as to how the shrimp market is likely to react to both developments should be available by early January.

In Japan, the market has bottomed out and traders forecast some stability during the coming weeks. However, no sharp rise in prices is expected although supplies of black tiger shrimp are low all over Asia. The supply situation in China remains burdensome. Lately an outbreak of "bird flu" virus has been detected in Hong Kong which may affect the catering trade during the year-end period.

The main categories of US imported shrimps for the January - October period included frozen, shell - on shrimp at 207 000 TM, an increase of 25 % (+19% in value terms). Peeled shrimp imports amounted to 119 600 TM (valued at U$S 907 million) which represents an increase of 22% (+18% in value). During the period, imports of breaded shrimp products doubled compared to the previous year.

In the frozen shell-on category, the largest counts (<15/kg) and the smallest counts (> 70/kg), registered a decline in both value and volume terms compared to the same period in 2002. These were exceptions to the general upward trend for the other counts. The medium sizes, especially 31/40 counts, increased their share of volume imports, accounting for 12 % of the total frozen shell-on imports.
There has been a decrease in average prices for all counts of imported shrimp compared with last year. The exceptions are sizes 15/20 and 21/25 for which average prices remained relatively compared with 2002 levels.

US MARKET: Shell – on frozen shrimp imports, by counts, Jan- Oct 2003-02

Thailand remains the main supplier of shrimps to the US market accounting for 26 % of total volume imports. One of the most interesting developments is the increase in the Chinese share of imports. From fifth place in the first quarter, China had jumped to second position by the end of the 10 month period. Vietnam (12% market share) and India (9% market share) are third and fourth respectively. Ecuador (7%) and Brazil (5%) were the main volume shrimp suppliers from Latin America. Mexico reported a substantial decline compared to the previous year. However, in value terms, Mexico is the fifth largest supplier, above both Mexico and Brazil.

Countries showing the biggest increases in import share compared to 2002 include China, Vietnam, Belize, Guatemala, Brazil and Nicaragua. Small sizes came mostly from South American countries, particularly Brazil while China was also a steady supplier in these categories. The principal countries supplying larger sized shrimp include Ecuador, Vietnam, India and Mexico. Regarding processed shrimp, Asian countries remain the leading suppliers.

US SHRIMP IMPORTS BY ORIGIN, JAN- OCT 2003-02

CURRENT US TRENDS

Despite improved sales for the holiday period, the US shrimp market remains rather quiet but is influenced by the strong supply situation. White shrimp, particularly of Asian origin, continues to constitute the bulk of supplies. The influx of Asian farmed whites is impacting negatively on prices for other shrimp, including the domestic Gulf and Mexican production. On the other hand, black tiger shrimp seems to have strengthened a little, probably due to relatively lower supply levels. Customers of Latin American shrimp suppliers are reportedly gravitating towards cheaper Asian pond raised whites. Current quotes in many cases, according to some traders, are even lower than importers’ costs. Meanwhile, small shrimp sales are somewhat better and prices have stabilized.

In terms of supply industries, the Ecuadorian farmed shrimp industry is slowly but firmly recovering, according to a report recently published by the CNA (National Aquaculture Chamber). After the white spot problem which relegated Ecuador from the list of leading shrimp producers, national production is gradually returning to former levels. By October this year, shrimp export sales for 2003 had amounted to some 252 million dollars. Although this figure is much lower than the one reached before the impact of white spot disease (617 million dollars in 1999), it has exceeded the figures reached in similar periods of the last few years. Farmers are now facing the new reality of low prices, and have been continuously demanding their government for assistance in loan allocations and other benefits in order to regain competitiveness.

JAPAN

The shrimp market in Japan has started to turn around from the weakening phase. Prices of black tiger stopped declining in the domestic market. A similar trend has been observed at international level as Japanese and US buyers have moved in on this segment. Harvests of black tiger shrimp from farms remain low in most of the producing countries. Farmers are forced to refrain from harvesting as long as possible.

The decline in the Japanese market for black tiger shrimp finally bottomed out during the first week of December. Active trading is reported along the whole distribution chain. Demand continues to be good for Indonesian products followed by Vietnamese and Indian black tiger shrimp. High quality Indian products are short supplied which are selling well in Kansai area (Osaka) compared to the Tokyo market. The expensive Indonesian products are also being substituted by the Vietnamese ones which are cheaper than the former. Regarding head-on shrimp, a relatively warm autumn has adversely affected household demand.

As of October 2003, Japanese frozen shrimp imports showed a 5.6% decline compared to the same period last year. Supplies from Indonesia (+2.3%), Vietnam (+14.6%) and China (+6.6%) increased but fell from India (-21.4%), Thailand and the other major sources. There was a drastic fall in imports from Argentina (-65%) and supplies from other sources of cold water shrimp were also marginal during this period.