magazine for sustainable sourcing and market intelligence24 SOURCING UPDATE India56 MARKET OPPORTUNITIESin Japan for 2020 26 COMPANY PROFILE Shiok Meats#8 December 2019alternative shrimpthreat or treat? Powered by©2019 Stichting Seafood Trade Intelligence Portal (STIP). ShrimpTails is an STIP (www.seafood-tip.com) publication and has four issues per year.17 December 2019disclaimerLimitation of liability: STIP is not responsible for any errors in or accuracy and availability of the infor-mation provided through ShrimpTails magazine or its Platform. The information provided through ShrimpTails magazine or its Platform is for informational purposes only and not intended to serve as the sole source of information for User to make a business, trading or investment decision. 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In no event shall the liability of STIP exceed the fees paid in the twelve months preceding the event causing damages.Editor-in-Chief Willem van der Pijl / STIP (NL)Deputy Editor-in-Chief Sophia Balod / STIP (NL)Editorial Assistant Sander Visch / STIP (NL) Editors Annette van Tits, Josanne Blokker & Jo Hamilton-Bilijam / Editors Collective Amsterdam (NL)Contributors Jasmijn Venneman / STIP (NL), Adeyemi Ademiluyi / STIP (NL), Leo Voetman / STIP (NL), Alban Caratis / Fresh Studio (VN), Andres Fajardo (EC), John van Herwijnen / Open Europe (ES), Moin Uddin Ahmed / Solidaridad (BD), Liris Maduningtyas / Jala (ID), Mazhab Uddin / Consultant (BD) & Aquaconnect (IN) Graphic & Illustrative design Marnix de Klerk & Nina Mathijsen / Detour (NL)Cover photography Royal GreenlandWebsite support Mathijs van de Venne / Tenpitch (NL)Support Bram Verkerke / Solidaridad (NL)Advertising and sales Jasmijn Venneman / STIP firstname.lastname@example.org t +31 6 40 81 33 61 silver membersgold membersShrimpTails and Seafood Trade Intelligence Portal are powered by Solidaridad Network. contents05 editorial 44 southern europe06 could a young west-ern generation put our shrimp industry at risk?08 introduction to sourcing updates26 company proﬁles38a (rabo)banker’s perspective on the shrimp industry56 market opportunitiesin japan for 202014 mapping carrying capacity46 alternative shrimpthreat or treat to the industry?49 russia’s shrimp industry on the upswing50 what’s holding alternative shrimp back?62 blended learningexpanding farmers’ knowledge in Indonesia36 introduction to market updates18 vietnam54 north-western europe60 united states24 india34 bangladesh30 indonesia12 ecuador20 market overviewthe rise of alternative shrimp66 shrimpless shrimpthe Big Taste Testcolumnsourcing updatesmarket updatesin-depth tailswalton family foundation32 spotlight onCAPPMA58 top-ranked thai unionshares concerns on ssiinterviews04shrimptails | editorial 05shrimptails | editorialWhat a year it has been! As 2019 comes to an end, we celebrate the big and small milestones of ShrimpTails. Within two years, we have already produced eight editions packed with numerous riveting stories, updates and infographics for the global shrimp audience – you! Before diving into the contents of this edition, we’d like to brieﬂy reﬂect on the production and market developments in the past year. This year, while we do not yet have all the data, we have witnessed an increase in the production of the global shrimp supply compared to 2018. Furthermore, we can reﬂect on a generally stable year in which the major markets have reported steady demand and relatively constant prices, especially com-pared to the much more tumultuous 2018. As we face another year in the world of shrimp, we bring you this edition focused on “alternative shrimp.” While working on an entire issue of “shrimpless shrimp” may sound like an oxymoron, we cannot deny the current trends that have led to a rise of alternatives such as plant-based shrimp, surimi shrimp and even lab-grown shrimp! The plant-based food movement and meat substitutes have found global popularity, but vegan shrimp is covering entirely new grounds. Save for the Asian markets, such as China, which have been producing a vast array of seafood alter-natives for generations, particularly for religious reasons, shrimp substi-tutes have only recently conquered the Western market. In this edition, we want to put the alternative shrimp industry in the spotlight by analys-ing their current and potential markets. We’ll also tackle your burning question: are shrimp substitutes a real threat to the industry, or is it just the latest fad, likely to pass soon? We talked to numerous seafood analysts and industry leaders to bring you the most comprehensive answer to that question. In this edition, we fur-thermore interview the CEOs of some of the world’s leading innovators and producers of alternative shrimp. Finally, to complete our research on these products, we of course had to see – taste, more like – for ourselves what we were dealing with. We therefore undertook “The Big Taste Test,” in which we sampled diﬀerent alternative shrimp products and assessed their appearance, structure, smell and taste. Are they actually comparable to real shrimp? Or are they a poor (processed) imitation of the real thing?So, interesting things are once again happening in ShrimpTails. We thank you for your continued support and hope that you ﬁnd this edition an insightful holiday gift as we welcome 2020. Hon Sophia BalodDeputy Editor-in-chief, ShrimpTailseditorial 06shrimptails | opening lettercould a young western generation put our shrimp industry at risk? JOHN SACKTON, FOUNDER OF SEAFOODNEWS, SHARES HIS EX-PERIENCE IN THE SHRIMP INDUSTRY AND HIS VIEWS ON THE UP-SWING OF VEGETABLE PROTEIN SHRIMP.my family. However, I was shocked when my own adult children said they would consider buying this type of fake shrimp.Their reasoning ﬂoored me. They love the taste of seafood, and eat a lot of shrimp. But they said they would consider fake shrimp be-cause it was a better environmen-tal choice.This attitude should be a red ﬂag for the shrimp industry. In the US, per capita beef consumption has fallen 39% over the past 40 years, a decline of 0.40 kg per year. The reason is partly attributed to con-cerns about beef from a health and environmental perspective. In the US and Europe, a large cohort of young people purchase food based on concerns about its I was raised in Texas, far from the sea. Yet I was attracted to the ocean and became an avid recreational ﬁsherman on the Island of Nan-tucket, with my wife’s family, 30 miles oﬀ Massachusetts.My previous experience was in jour-nalism, so 10 years out of Harvard when marriage and fatherhood demanded that I choose a profes-sional career, I chose seafood. My ﬁrst thought was to continue as a journalist. I wrote articles for the industry trade press and earned a master’s degree in Marine Af-fairs from the University of Rhode Island.In my 40-year seafood career, I have witnessed major ﬁsheries collapse, the rise of aquaculture in salmon and shrimp, changing consumer tastes, various disease outbreaks, and the continued resilience of our industry. Today we see a resurgence of investment in both shrimp and the broader seafood industry. When I was in Ecuador recently, the new investment to increase the eﬃciency of existing ponds was stunning. In India, de-spite widespread disease issues, the expansion of shrimp into new areas continues at a rapid pace. But all of this investment and expansion is now coming under threat from a source outside of the seafood industry. Today we face the question of whether the younger generation of Western consumers could potentially abandon shrimp. The threat is from “fake shrimp,” i.e. vegetable protein processed and conﬁgured to have the look, taste and mouth-feel of natural shrimp.Why would we even consider this a threat? US per capita shrimp con-sumption has risen 22% since 2013. I eat and cook a lot seafood and passed on this seafood passion to I WAS SHOCKED WHEN MY OWN ADULT CHILDREN SAID THEY WOULD CONSIDER BUYING FAKE SHRIMP”For these reasons, an “environmen-tally friendly” vegetarian shrimp has a real potential to gain market share in Western economies.This new threat heightens the importance of a clear, unambigu-ous global sustainability message. Certiﬁcations are certainly im-portant. But they are not enough. For example, ASC certiﬁcations require the use of non-GMO soy-meal for feed, and yet only about 2% of global soya production is non-GMO. In Ecuador, the lack of suitable feed capacity is a limiting factor in producing enough ASC certiﬁed shrimp for the European market. Some of these consum-ers unable to get ASC shrimp are quite possibly targets for vegeta-ble protein shrimp.To meet the challenge of thefood choices of the younger generation, the shrimp industry will have to prioritize ecological concerns. This means moving even more rapidly to no antibiotic use; to using high-quality extruded feeds with algae-based marine oils and other ﬁshmeal and oil sub-stitutes; and it means addressing density concerns in ponds and maintenance of water quality.Some of the fastest growing shrimp areas in India are expe-riencing precipitous declines in pond success with survival rates from stocking post-larvae falling from 70-80% and higher to around 30%. The industry solution has been to simply create more ponds. Environmentally conscious con-sumers will not accept this.Ecuador, in turn, uses an extensive model that can achieve technolog-ically based increases in output without requiring antibiotics or adding to stress on water quali-ty. This type of production must be highlighted to convince the new generation that shrimp is an ecologically and environmentally acceptable food.So long as pond survival rates are decreasing, it undermines the claim that shrimp farming is sustainable over the long term. The competitive pressure from vegetarian manufactured shrimp will continue to grow until the indus-try can show stable success rates year after year, based on a sustainable ecologi-cal footprint.ecological impact. It is these con-cerns that lead to the success of companies like Beyond Meat and Impossible Burger.The US dairy industry has also seen a huge erosion in retail shelf space as soya milk, almond milk, and other non-dairy products have come to represent about 15% of all US dairy sales. Again, health and environmental concerns are the driving factors.The global shrimp industry has to take this threat seriously. Farmed seafood, including farmed shrimp, has had to ﬁght for consumer acceptance of its environmental footprint. Even though issues around mangrove deforestation were largely addressed more than 20 years ago, the public associ-ation of farmed shrimp and mangrove destruction has not been eliminated.Furthermore, campaigns by the domestic industry in the US, and health campaigners in Europe, have highlighted issues around use of antibi-otics in shrimp. Periodic disease outbreaks that make global headlines do not help the industry’s image. 07shrimptails | opening letterFARMED SHRIMP HAS HAD TO FIGHT FOR CONSUMER ACCEP-TANCE OF ITS ENVIRONMEN-TAL FOOTPRINT”08shrimptails | introduction to sourcing updatesIN THE PREVIOUS ISSUE, WE PREDICTED AN INCREASE IN PRO-DUCTION OF THE GLOBAL SHRIMP SUPPLY IN COMPARISON TO 2018. THAT SCENARIO SEEMS TO CONTINUE TOWARDS THE END OF THE YEAR AS PRODUCTION HAS NOT DECLINED SIGNIFICANT-LY, CONTRARY TO SOME MEDIA’S PREDICTIONS. WITH THE LAT-EST DATA NOW AVAILABLE, WE EXPECT GLOBAL SHRIMP PRO-DUCTION AND EXPORTS TO SHOW A SLIGHT UPWARD TREND OVER 2019. FURTHERMORE, IT SEEMS SOME CROPPING PATTERNS DIFFER SLIGHTLY FROM THE TRADITIONAL STOCKING AND HAR-VEST CALENDAR.LOOKING AHEAD INDIAThis year’s stocking in India seem to deviate from traditional patterns. Reports from the ﬁeld and rela-tively high broodstock imports in October conﬁrm the rumours that Indian farmers, especially in Andhra Pradesh, are currently working on a new crop which will be harvested in January and might bring more vol-ume of shrimp to the market than usual early 2020. Once this crop is harvested, farmers will take a short crop holiday. With shrimp prices expected to remain at a proﬁtable level, we predict that next year’s ﬁrst crop will largely be stocked in February and March – earlier than this year when many farmers decid-ed to stock much later due to low prices and market uncertainty.VIETNAMAccording to VASEP, Vietnam is now 6.2% ahead of production volumes in quarters one to three compared to 2018. However, a limited stocking and harvest during quarters three and four might reduce this number slightly, though we still expect Vietnam to produce more shrimp than last year. The current high price levels, combined introduction to sourcing updates LOOKING BACKConsidering shrimp export data of the main shrimp producers around the world, the combined output shows a positive growth of 4.93% in terms of export volume and a decline of only −4.95% in terms of export value by the group of producers presented in the table. While the data is only available un-til September and for some sourc-ing countries until October, we cannot make any deﬁnite conclu-sions related to 2019 export ﬁgures. However, in early December, export ﬁgures showed negative growth for China (−23%), Thailand (−4%) and Argentina (−16%). Meanwhile, Ecuador shows the highest growth rate (27%) and India surprisingly demonstrates a positive growth rate (4%) despite production prob-lems during quarters two and three. Sources mention that a part of this increased growth was accounted for by exports of leftover invento-ry from 2018.Sourcing countries globally have faced diﬃculties supplying the market with large-sized shrimp, as both diseases and weather con-ditions aﬀected the crops during quarters two and three. While Indian farmers were hesitant to stock due to sighting of diseases, Vietnamese farmers were held back by the weather forecasts and some Indonesian farmers had to harvest early to combat diseas-es. This led to a minor surplus of smaller shrimp sizes, and an increase in purchasing prices for larger sizes of shrimp on the global market.Sander Visch09shrimptails | introduction to sourcing updateswith limited shrimp stocking for the third and last crop, lead us to expect that shrimp prices in the Central region will continue to increase due to strong demand during the Tet holiday at the end of January. This year, bleak prices at the beginning of 2019 forced farmers to wait until the end of February and early March to start stocking. Next year, we expect prices to remain as they are now until at least the end of January and to see stocking in the ﬁrst weeks of February.INDONESIAWith purchases for the holiday season coming to an end, we do not expect prices to increase much towards the end of the year. As farmers restocked in November, we believe a new harvest will com-mence in January-February. While normally in this period the global supply from India is low, for 2020 that country is expected to also have a considerable harvest, put-ting pressure on the competitive-ness of Indonesia, which therefore might have to adjust its prices again. That being said, processors may want to pay a bit more to encourage farmers to stock their ponds for a new crop.BANGLADESHDecember marks the end of the main cultivation season for black tiger shrimp (P. monodon) in Ban-gladesh, and production will re-sume from March onwards. As the freshwater prawn sector has faced a diﬃcult period around mid-Sep-tember and post-larvae availability was low for the season, prices are expected to increase during the peak season, which runs from January until March. For the com-ing year, we expect Bangladesh to have diﬃculty competing with the global supply of small-sized Paciﬁc white shrimp (L. vannamei). Therefore, a large percentage of the shrimp will likely be sold on the domestic market.ECUADORPrices in Ecuador are expected to drop slightly from December onwards, as this month marks the end of the demand peak from China preparing for Chinese New Year. Ecuador started 2019 with very low farm gate prices, which we don’t foresee happening next year due to strong market demand for their larger sizes of shrimp. Looking ahead to 2020, the production growth projec-tions for and from Ecuador are positive, ranging from 9% to 15% according to industry sources. While the perspective on growth is positive, local sources expect next year to be a more challenging year compared to this one. This is largely related to the uncertainty surrounding the continuation of stricter laboratory tests on Ecua-dorian products by China, and the need to start implementing a ﬁrm strategy for the diversiﬁcation of markets. Considering the current issues that the country faces, the call for market diversiﬁcation has been stronger than ever and will be a high priority for Ecuadorian suppliers in 2020.YEAR-ON-YEAR EXPORT PERFORMANCE OF MAJOR SHRIMP PRODUCERSCOUNTRYVOLUME (TONNES)VOLUME (TONNES)VOLUME (%)VALUE ($ ’000)VALUE ($ ’000)VALUE (%)BANGLADESH2CHINA4INDIA4INDONESIA3THAILAND4VIETNAM3ARGENTINA4ECUADOR420,783157,081516,391141,348115,709N/A156,405413,77720182019YEAY-ON-YEAR GROWTH1 JANUARY-JUNE 20192 JANUARY-AUGUST 20193 JANUARY-SEPTEMBER 20194 JANUARY-OCTOBER 20192.38-22.754.060.89-3.78N/A-15.7626.75-2.07-25.000.48-6.23-5.284.95-22.6412.90220,1591,341,0073,939,8001,194,2551,147,4941,607,372846,7913,011,05421,277121,344537,363142,607111,330N/A131,758524,457224,8081,787,9593,921,0951,273,5481,211,5111,531,4971,094,6112,667,114sources: trademap, gacc, vasep, cna, bpsNext >
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