Market Trends of shrimp Industry
Occurrence of outbreaks and low-quality production facilities are impacting Asia's production
- Global shrimp production grew by 5.29% from 2017 to 2022. As per the Global Seafood Alliance's (GSA's) annual production survey, global shrimp production is forecast to jump to the highest production ever, driven by a sharp expansion of Ecuador's shrimp farming industry. Ecuador's shrimp production saw 41% growth in 2021, the single largest nominal growth of any aquaculture industry.
- Globally, Asian countries produce the most shrimp. About 45% of the world's shrimp come from Asia. Shrimp production in Asia was expected to see minimal growth in 2023, as many individual farmers either abandoned or reduced their sowing. In 2022, weather issues, disease, and rising feed costs in China and India resulted in negative overall growth. A combination of constantly occurring problems such as Enterocytozoon hepatopenaei (EHP) and early mortality syndrome (EMS) lead to an increase in production costs. Production in Vietnam remained almost flat in 2022. The small-scale and low-tech nature of the farms, pollution, poor water quality, impacts of climate change such as saltwater intrusion, and the lack of quality infrastructure are a few factors restraining the country's shrimp production.
- Production in Indonesia grew slightly as the country is mostly dependent on the strong US market. However, the market is expecting a downturn due to higher production costs. In Indonesia, the government has set targets to increase its shrimp production to 578,000 MT in 2024. Shrimp farming has expanded significantly beyond the traditional hubs of Lampung and East Java in recent years, with new farming clusters emerging in Sulawesi and the eastern areas of Indonesia, particularly East Nusa Tenggara. These new regions are projected to play huge roles in Indonesia's shrimp production in the future.
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Rising supply chain costs are leading to growth in prices
- Between 2017 and 2022, the price of shrimp at a global level increased by 8.47%. High freight rates, the rising cost of marine fuels, and logistical disruptions, including bottlenecks at seaports across regions, propelled wholesale prices. Demand for shrimp is expected to grow at the fastest rates in East and Western Europe and the US. High freight costs have caused import prices to rise by USD 0.70 to USD 0.80 per kg for products going from Asia to North America and Europe. Shipping prices remained high until the summer of 2022.
- In the United States, the price of shrimp increased by 0.96% in 2022 compared to the previous year. Higher shrimp prices are leading to lower demand in the United States, but even so, prices are expected to remain elevated as fishing companies work to reduce inventories. Even as farmers are paid less to grow shrimp, resulting in lower inventories worldwide, the prices US retailers offer consumers are based on what they paid for the product months ago, in addition to cold storage costs, which have grown with energy prices due to the war in Ukraine.
- In Europe during the first half of 2023, the prices of shrimp varied from USD 33/kg to USD 67/kg. In 2021, the ex-farm prices of shrimp in producing countries remained stable until July but started to increase from August onward due to the lower supply in Asia. In Ecuador, average export prices rose to around USD 6.00/kg, the highest level since December 2018. In India, the prices fluctuated because supply was volatile, but the prices were not as low as in Ecuador. The price increase hit all parties involved in the shrimp supply chain, and the high-priced stocks accumulated by the COVID-19 pandemic induced a surge in demand in 2021.
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