Uncertain outlook for European shrimp markets during the second half of 2005

Initial indications suggest that the record import levels of 2004 will not be repeated in several key European shrimp markets this year. Although Italian volume imports are up, first quarter frozen imports for Spain and France are down in volume, and value, terms on the same period for 2004. The strengthening of the dollar during the first half of 2005 is also likely to gradually impact on euro prices as the year progresses and may mean a further weakening of demand, in euro markets, during the second half.

SPAIN - Strong increase in Spanish frozen shrimp imports from China

First quarter indications point to a drop in Spanish shrimp imports this year. Volumes are down 12%, to 24 000 tonnes, compared to first quarter 2004, while the value of imports is down 14% to €127 million. However, the most striking feature of Spanish import trends during the first quarter is a clear shift in import shares among the leading supply countries with a decline in imports from South America balanced, partially, by an increase from Asia. In the key import category of frozen shrimps (which excludes both chilled and processed shrimp products), the Argentinean share of imports collapsed from almost 16% during the first quarter of 2004 to less than 4% this year. This share decline corresponds to a drop in volume imports from over 4 000 tonnes to 800 tonnes and appears to be due in large part to a drop in wild shrimp (Pleoticus muelleri) catches in Argentina.

Spanish shrimp imports in 2005 are also down from Brazil, the other major South American shrimp supplier to Spain. Spanish frozen shrimp imports from Brazil had increased steadily in recent years, rising from almost 3% of total frozen imports in 2001 to almost 15% last year. This increase has been due to Brazil’s rapidly expanding farmed shrimp industry and to the adoption of a competitive pricing strategy by Brazilian exporters. Volume sales from Brazil to Spain for 2004 as a whole were up 21% to just under 18 000 tonnes. Initial indications this year, however, suggest an end to recent strong growth rates with volumes down over 40%, to 2 300 tonnes, compared to the first quarter of 2004. This decline in Brazilian sales to Spain is no doubt linked to an apparent fall in shrimp production in Brazil last year.

The drop in frozen supplies from South America, which also includes a 10% fall in imports from Ecuador, contrasts with a strong increase in sales from China, up fifteen fold, to over 4 000 tonnes, on first quarter imports last year. This increase marks a return to the 2001 level for Spanish imports from China before EU restrictions sharply reduced shrimp trade from China to the EU. The current increase in sales from China follows an easing of EU controls but appears also influenced by a shift by Chinese exporters from the US market where anti dumping measures are in force against China and several other countries. US volume imports from China for the first four months of this year have more than halved compared to the corresponding period in 2004. China’s strong sales increase to Spain appears to have been helped by a competitive pricing strategy as reflected in an average unit value of €3.31/kg for Spanish imports from China compared to an average of €5.35/kg for total Spanish frozen shrimp imports. It is interesting to note that the average unit value for shrimp imports from China is the same as that for Brazilian imports suggesting that Brazil is facing increased price competition on European markets this year.

FRANCE - Pause in rapid expansion of French shrimp imports from Brazil

France followed the Spanish trend during the first quarter of 2005 with shrimp imports down in both volume and value terms on the same period last year. Total import volumes fell 4% this year to just over 20 000 tonnes while import values were up 4% to €95 million. The decline follows several years of increasing import volumes helped by falling prices, notably for farmed shrimp. The increasingly competitive import price trend of recent years is reflected in falling unit values for shrimp imports with average values declining from €7.62/kg during the first quarter 2001 to €4.69/kg this year. In the key frozen shrimp category, average unit values have declined steadily between 2001 (€7.98/kg) and 2004 (€4.43/kg). For the January – March period this year, however, average values are showing an increase of 3%, to €4.56/kg, on last year.

In terms of import share, Brazil remains the leading volume supplier although the upward trend in Brazilian sales of recent years appears to have come to a halt, at least for the present, with its share stabilizing around 30% of total frozen imports. Madagascar, the leading shrimp supplier to France in value terms, has an unchanged import share this year, in volume terms, of around 10% of total frozen imports. Finally, Ecuador, the third largest volume supplier to France, slightly increased its share of first quarter imports from 7% in 2004 to 8% this year.

ITALY - Upward trend in shrimp volume imports continues in Italy

Italian import trends this year contrast with those of Spain and France with volumes up 5% for the first quarter to over 12 000 tonnes. However, in value terms, the Italian trend is in line with these two countries with a 4% decline to €61 million. In the frozen segment, which accounts for over 80% of Italian shrimp imports, first quarter volumes are up 4%, to 10 000 tonnes, while values declined by 6%, to just over €47 million.

Ecuador is continuing to consolidate its leading position as a frozen shrimp supplier to the market. For 2004 as a whole, Italy doubled its frozen shrimp imports from Ecuador to over 10 000 tonnes, with the Ecuadorian share of Italian frozen imports at over 20%. This trend has continued into 2005 with the first quarter import share for Ecuador jumping to a third. More generally however, and with the exception of several countries such as Ecuador, Italian import trends this year appear to be similar to those of Spain. The Argentinean share of imports is down significantly while sales from Asian countries such as China and Vietnam have increased.

The slowdown in shrimp imports during the early months of 2005 is evident not only in certain European markets but also in the US and Japanese markets as well. In Europe, the fall in the value of the dollar since the beginning implies higher price levels in euro terms for imports. With both increasing prices and subdued consumer demand conditions in key European shrimp markets, the outlook for the remainder of 2005 is for a somewhat difficult period for suppliers.

Gerry O’Sullivan
© 2005 FAO