< PreviousCONCLUSIONThe main question for 2020 is whether the increased demand that we foresee for quarter one is strong enough to sustain stable prices when India, and other Asian producers, experience a strong ﬁrst crop. Keeping in mind current and expected prices for next year’s ﬁrst quarter, farmers across Asia will likely be encouraged to stock their ponds early in the year at a larger scale than in 2019. If this indeed happens, around May a large har-vest will enter the market and it is not clear whether the market de-mand is strong enough to absorb this harvest without prices drop-ping. If this drop does happen, farmers will likely be reluctant to stock their ponds for a second crop and the stocking pattern in 2020 could repeat that of 2018. If prices do not drop after the ﬁrst harvest and farmers are able to maintain their proﬁtability, 2020 may turn out to be a record year as farmers would be encouraged to stock at a high level for their second crop as well.GET YOUR ONE-MONTH TRIAL NOW!A WEEKLY SHRIMP FARM GATE PRICE UPDATE?ANDHRA PRADESHMEKONG DELTACA MAUGUAYASEAST JAVAKHULNAPEAK SEASONLOW SEASONOFF-SEASONJANUARYJANUARYMARCHMARCHJUNEJUNESEPTEMBERSEPTEMBERNOVEMBERNOVEMBERFEBRUARYFEBRUARYMAYMAYAUGUSTAUGUSTAPRILAPRILJULYJULYOCTOBEROCTOBERDECEMBERDECEMBERPACIFIC WHITE SHRIMPL. VANNAMEIBLACK TIGER SHRIMPP. MONODONREGULAR HARVESTING CALENDER*10shrimptails | introduction to sourcing updates* THIS HARVESTING PATTERN IS BASED ON THE HISTORICAL PATTERN OF PREVIOUS YEARS; THIS YEAR’S HARVESTING PATTERN MAY DIFFER.sourcing updateecuadorIN THE PREVIOUS UPDATE, WE SPOKE ABOUT THE FUTURE LOOK-ING BRIGHT FOR ECUADOR, WITH INCREASING EXPORT PRICES AND BREAKING EXPORT RECORDS MONTH AFTER MONTH. AT THE TIME OF PUBLICATION OF THE LAST ISSUE OF SHRIMPTAILS, HOWEVER, CHINA INTRODUCED AN EXPORT BAN FOR FIVE LARGE EXPORTERS, CHALLENGING THE RESILIENCE OF ECUADORIAN PRODUCERS TO BATTLE THEIR DEPENDENCY ON THIS LARGE MARKET. NOW, ECUADOR HAS PROVED ITS RESILIENCE, WITH DE-MAND AND EXPORTS STILL GROWING AND FARM GATE AND EX-PORT PRICES INCREASING. THE QUESTION REMAINS HOW LONG AND HOW FAR THIS RESILIENCE CAN BE STRETCHED WITHOUT DECREASING THE COUNTRY’S DEPENDENCY ON CHINA TO SOAK UP THE VOLUME THAT, ACCORDING TO THE CÁMARA NACION-AL DE ACUACULTURA (CNA), IS PREDICTED TO GROW CLOSE TO 700,000 TONNES IN 2020. LOOKING BACKLOOKING AHEADTaking a look at the trade data of the past few months, in the last Ecuador sourcing update stable growth was reported until July 2019. In August, exports continued to grow, reaching a monthly export volume of 56,673 tonnes, but September data showed a dip to a volume of 50,817 tonnes, a result of China’s imposed export ban. In October, the exports had already recov-ered and were 53,000 tonnes. From January-Oc-tober 2019, exports were reported at 524,457 tonnes with a total value of $3.03bn. This is up by 26% when compared with the same period in 2018. Taking into account the data until October 2019, Ecuador continues on its way to reaching 620,000 tonnes of exports by the end of 2019.Looking at Ecuador’s most important export market – China – more speciﬁcally, even includ-ing the dip in exports in September, the total year-to-date exported volume to China was 334,000 tonnes, marking a 292% year-on-year increase. Since September, the export data has not reported any export activity from Ecuador to Vietnam. With data showing this trend for the second month in a row, we can conclude that Ecuador has fully transitioned from indirect to direct trade with China. As for Ecuador’s other two major export mar-kets – the US and Europe – both indicate a cumulative increase in exports in 2019 compared to the same period in 2018. Europe is experienc-ing a 5.65% increase on 2018 with a total year-to-date export volume of just over 100,000 tonnes. The US is showing a 6.45% increase compared to the same period in 2018, importing almost 65,500 tonnes. Asian markets, among which are Thailand and Malaysia but excluding Vietnam and China, continue to experience a remarkable increase: the year-to-date ﬁgures indicate a jump of 36.3% to 12,200 tonnes. While some might have expected prices to drop drastically because of the China ban, which was in fact the case in the period immediately after the ban, the opposite happened in October. As demand in China continued to grow so did the uncertainty of importers about being able to se-cure the volumes for Chinese New Year. This led to an increase in prices starting from October at both farm gate and export level. At farm gate level, prices started to rise by an average of $0.50/kg, especially for the larger sizes which are traditionally most in demand for Chinese New Year. Halfway through Novem-ber, as everyone was competing for suﬃcient volumes to ﬁll orders, our local sources re-ported larger processors outcompeting small and medium-sized processors resulting in the cancellation of orders. At export-price level, after a slight decline in the average export price to $5.59/kg in September, in October the export prices bounced back to the same level as seen in August of $5.77/kg. Local sources expect prices to remain high until December when a small decline is predicted, but not to the price levels seen at the beginning of 2019 Looking ahead to 2020, the growth projections for and from Ecuador are positive, ranging from a rather conservative 9% increase in production according to the CNA to 10-15% according to sources at some of the larger Ecuadorian export-ers. Exporters’ projections are based on the fact that other producing countries will likely produce less while demand is growing continuously.While the perspective on growth is positive, local sources did tell ShrimpTails that 2020 will be a more challenging year compared to 2019. This is largely related to the uncertainty surrounding whether China will be continuing with stricter laboratory tests on Ecuadorian products, and the need to start implementing a ﬁrm strategy for the diversiﬁcation of markets. Another factor, more on a macroeconomic level, is the political decision to increase fuel prices. This could well inﬂuence the industry in terms of competitivity. Another important factor is the potential further political unrest in the country. Considering the current issues facing Ecuador, the call for market diversiﬁcation has been stronger than ever and will be a high priority for Ecuadorian suppliers in 2020. It will be interest-ing to see how the issues with China will play out and whether Ecuador is able to ﬁnd a successful strategy to distribute its export volume more evenly among its main markets and, even more importantly, to new markets. 12shrimptails | ecuador sourcing updateJasmijn VennemanAs for China, on 27 November it was announced that China lifted the remaining four import bans. While un-til then the only news available was that the additional laboratory tests would most likely be lifted by the 30 November, the eﬀorts of the CNA have paid oﬀ and the import bans were lifted completely. Whether this means the additional laboratory tests will continue to take place on Ecuadorian shrimp products imported into the country is still unclear.international trade newsPRICE OF PACIFIC WHITE SHRIMP IN ECUADOR8.006.004.002.000.001 apr. 20191 july 20191 oct. 2019$/kgcount3040506070 13shrimptails | ecuador sourcing update1 jan. 201914shrimptails | mapping carrying capacityTHE FRAMEWORK IS BUILT ON A COMBINATION OF AVAILABLE DATA, COMPLEX SCIENTIFIC CALCULATIONS AND FIELD SURVEYS”SHRIMP FARMING AND THE DISCHARGE OF EFFLUENT THAT IT OFTEN ENTAILS CAN HAVE AN EFFECT ON THE SURROUNDING ECOSYSTEM. THE ENVIRONMENTAL IMPACT OF SHRIMP FARM-ING PRACTICES DEPENDS ON THE FARMING OPERATION ITSELF, BUT ALSO ON THE “CARRYING CAPACITY” OF AN ECOSYSTEM: THE ABILITY OF AN ECOSYSTEM TO SUPPORT THE ADDITIONAL LOADING FROM SEVERAL SOURCES WITHOUT ENVIRONMENTAL DEGRADATION. RUI GOMES FERREIRA FROM LONGLINE ENVIRON-MENT (LLE) AND ANTON IMMINK FROM SUSTAINABLE FISHERIES PARTNERSHIP (SFP) HAVE JOINED FORCES TO DEVELOP A “CAR-RYING CAPACITY TOOL” THAT HELPS REGULATORS AND FARM-ERS WITH MARINE SPATIAL PLANNING AND PREDICTIVE ANALYT-ICS FOR SUSTAINABLE SHRIMP FARMING.stakeholders and informing them of the sustainability issues within the supply chain, it aims to encour-age the industry to make positive changes.Ferreira explains that the frame-work, available at www.aquascape.tech, is built on a combination of available data, complex scientiﬁc calculations and ﬁeld surveys. The framework integrates factors in space and time, and is designed to give a clear insight into the assim-ilative environ-mental carrying capacity, i.e. the amount of nu-trient pollution ecosystems can process without causing damage. The framework integrates land and aquaculture assets, including agricultural stakeholders, such as rice farms and palm oil plantations, as well as the natural loads of or-ganic matter that ﬂow to the ocean in rivers and watershed basins. The platform provides the user with analytics on zonal carrying capacity mapping carrying capacity In much of Europe and North America, coastal zone planning approaches use tools to monitor, evaluate and restrict the impacts of business on the surrounding environment and ecosystem, and enforce the regulations concern-ing this. But this is not the case in the majority of shrimp producing countries. Over 18 months of collaboration, SFP and LLE have integrated a beta carrying capacity framework for the shrimp sector on the north coast of Bali and in East Java. LLE is a UK-based technology ﬁrm that delivers value-added services to the aqua-culture and ﬁsheries sectors by applying the outcomes of scien-tiﬁc-based research to practical management applications. SFP is a marine conservation non-proﬁt organization dedicated to helping the seafood supply chain be as environmentally friendly as pos-sible. Through engaging industry for shrimp production and nutri-ent load apportionment for both land and ocean-based sources, supporting regulators with shrimp farm licencing and facilitating a multi-stakeholder discussion surrounding coastal water quality management.AquaScape covers an area that includes 4,000 ponds, which have been deﬁned using a geographical information system. Local part-ners, including the Shrimp Club of Indonesia (SCI), have helped to ground truth the data and parame-terise the farm modelling compo-nents. Other land-use and produc-tion data, including agriculture and waste water, are incorporated. AquaScape digitises, aggregates and diﬀuses data sets, turn-ing data into information for regulators, farmers and the supply chain. AquaScape sim-pliﬁes outputs to facilitate im-proved decision making from regulators for licens-ing and emissions enforcement. Additional features in the pipeline are set to map disease outbreaks over diﬀerent regions and im-prove the baseline data collection to understand potential risks and impacts. Ferreira tells us that “signiﬁcant challenges exist in all shrimp production countries, including pressure on the environ-ment, under-regulated farms and the enforcement of legislation.” He explains that the framework helps governments (both nation-al and local) to understand the scale of various industries that discharge nutrients into the en-vironment and what the sustain-able licencing recommendations are in speciﬁc areas. This allows regulators to decide the maximum limits of eﬄuent and determine the boundaries that should be set for diﬀerent industries. As the tool includes multiple inputs (e.g. shrimp ponds/farms, rice ﬁelds, plantations, urban development), decision-making related to setting legislation and issuing permits should lead to discussion among marine spatial planners beyond aquaculture (for example, urban, agriculture and tourism planners). The government can use this tool to understand the development scenarios within the carrying capacity of the system. During the development of AquaScape, it has become apparent in some areas that shrimp farming has little nu-trient impact compared to other industries.All shrimp ponds have a unique identiﬁer and are modelled based on validated in-ﬁeld measure-ments. This means that Aqua-Scape is capable of modelling the expected production and outputs of each pond based on sound sci-entiﬁc data. AquaScape’s analytics can help governments or shrimp DECISION-MAKING RELATED TO SETTING LEGISLATION AND ISSUING PERMITS SHOULD LEAD TO DISCUSSION AMONG MARINE SPATIAL PLANNERS BEYOND AQUACULTURE” 15shrimptails | mapping carrying capacityThe graphical overview of depositions presented in the Aquascape tool.16shrimptails | mapping carrying capacityclubs to understand the key risks as aquaculture develops. Analyt-ical metrics, such as the number of production ponds to water treatment pond ratios, provide an indication of environmental stewardship. AquaScape has been of interest to numerous Indonesian govern-ment agencies, but how easy will it be to apply AquaScape to other countries? According to Immink, this is possible, and he gives the example of Ecuador, a country that is working hard to intensify the shrimp industry and increase its production. He tells us that AquaScape ﬁts into the sustain-ability vision of the Ecuadorian government: the extent to which regulators are able to license additional production without compromising the environment or surpassing the carrying capacity of a certain eco-system is of key importance.Ferreira men-tions that the current frame-work is a blueprint to understand the potential for AquaScape to be used by local governments that of-ten lack the resources for scalable, low-cost marine spatial assess-ments. Ferreira goes further, detailing AquaScape’s synergies with market-related concerns felt by shrimp buyers and consumers, and the opportunity to bridge the information gap about product provenance and transparency. Enforcement is the primary challenge and AquaScape provides a low-cost framework for the en-forcement of aquaculture licences, environmental footprints, and other challenges. Once the base data (farm size, production, etc.) is in the AquaScape framework, it is possible to start working on the structural improvement of the industry, and also on improving the quality of the data within the supply chain. Furthermore, buyers might be able to assess the produc-tivity, licencing and sustainability of a farm at a distance, reducing the requirements for ﬁeld visits for those working in the supply chain.The framework, developed with the support of the Walton Fam-ily Foundation and SEAPACT, is a comprehensive and scalable tool to promote improved de-cision-making, legislation and enforcement. AquaScape provides a working and accessible tool for authorities to understand and pre-dict the scale of impact of various industries. Full-scale adoption of AquaScape by authorities takes time and the hope is that in the future it will be used to manage aquaculture from a jurisdictional approach, with value-added fea-tures such as disease risk maps, early warning systems, and the ability to oﬀset some of the cur-rent and future risks associated with sustainable intensiﬁcation. THE FRAMEWORK IS A COMPRE-HENSIVE AND SCALABLE TOOL”The user interface of the Aquascape tool. 17shrimptails | mapping carrying capacitysourcing updatevietnamFARM GATE PRICES FOR PACIFIC WHITE SHRIMP (L. VANNAMEI) IN VIETNAM HAVE INCREASED SIGNIFICANTLY IN THE PAST THREE MONTHS, REACHING THEIR HIGHEST LEVEL IN TWO YEARS, LESS THAN ONLY SIX MONTHS AFTER REACHING WHAT WAS A NEW LOW. UNFAVOURABLE WEATHER CONDITIONS TOWARDS THE END OF THE YEAR AND STRONG MARKET DEMAND IN PREPARATION FOR CHRISTMAS COMBINED WITH CAUTIOUS STOCKING BY FARM-ERS HAVE CREATED A VOID BETWEEN SUPPLY AND DEMAND, AND ULTIMATELY HAVE LED TO HIGHER PRICES IN THE LAST QUARTER OF 2019. THE THIRD AND LAST CROP OF THE YEAR IS CURRENTLY BEING COMPLETED BY PACIFIC WHITE SHRIMP FARMERS. CON-TRARY TO LAST YEAR, WE BELIEVE THAT, IN 2020 FARMERS WILL RESUME PRODUCTION MUCH QUICKER.LOOKING BACKIt was foreseen that the production in Vietnam would decrease during quarter three and into quarter four. The main reason is that farmers, expecting less favourable weather conditions, have been stocking moderately for the third crop. VASEP reported 100,028 tonnes of Paciﬁc white shrimp production during quarter three. They also reported a total shrimp production of 504,413 tonnes in quarters one to three, which is a 6.2% increase compared to the same period in 2018.Despite this year-on-year increase, low harvests during quarter three led to a low supply of raw shrimp. Paciﬁc white shrimp prices in the Me-kong Delta have shown a signiﬁcant increase from the second half of August to December due to high demand of the year-end market, espe-cially for large-sized shrimp. In mid-December, raw material supplies could only fulﬁl 60-70% of processors’ capacity.This meant that most companies in the Mekong Delta have had diﬃculty fulﬁlling orders in the past few months. For instance, sources mention that Minh Phu’s export volumes in October fell by −20.76% year-on-year, whereas farm gate prices in November were on average 2% higher for 60 count per kg and 13% for 30 count per kg compared to the same period last year. The situation was further ampliﬁed by produc-tion diﬃculties in India, where many raw mate-rials are sourced by Vietnamese exporters for reprocessing. Between January and September 2019, Vietnam’s imports of Paciﬁc white shrimp from India fell to $119m, half of what it was last year in the same period, and a third compared to 2017. Data available to date for the prices of black tiger shrimp (P. monodon), on the other hand, shows that it has tended to be more stable, remaining high from the beginning of the year until now. Most of the black tiger shrimp farmers focus on the year-end harvest to catch high prices. Even if prices have decreased slightly, they managed to remain high due to the relatively stable demand for the year-end.With prices currently high and limited shrimp stocking for the third crop, shrimp prices in the Central region are expected to continue to increase due to strong demand during the Tet holiday at the end of January. Last year, bleak prices at the beginning of 2019 forced farmers to wait until the end of February and March to stock on mass. This year, we expect to see stocking in the ﬁrst weeks of February, and prices to remain as they are now until at least the end of January. Besides good prices and the Tet holiday, Viet-nam’s monsoon season – with heavy rainfall and a stark contrast in temperatures between day and night – seems to have already passed its peak in August. Rainfall in September, October and November was below the six-year average. This should comfort farmers into resuming production early. Despite this, we are hopeful prices will not drop as low as they have in the past two years during quarters one and two as inventories are not as packed as they were a year ago.Similar to Paciﬁc white shrimp, black tiger shrimp prices are expected to remain stable at the beginning of the new year with steady demand for export markets as well as domestic markets.At the GOAL conference in October, the results of the GAA survey reported a general growth rate for Vietnam at 6-8% per year. This will take annual production past 700,000 tonnes in 2020 and to almost 800,000 tonnes by 2021, divided among black tiger shrimp and Paciﬁc white shrimp. ShrimpTails expects an annual growth in production volume of around 7% as intensiﬁca-tion and professionalization are still increasing. 18shrimptails | vietnam sourcing updateLOOKING AHEADSander Visch and Fresh StudioReportedly, Van Thanh Luong, owner of the Ho Chi Minh City-based Viet-Uc Seafood is talking to several poten-tial investors. However, sources also believe that the company supplying one-in-three post-larvae to Vietnam’s shrimp farming industry may be for sale. Leading aquaculture feed company Biomar was spotted at the Aquacul-ture Vietnam in Can Tho on 16-18 October. According to Biomar’s rep-resentatives, the company comes to Vietnam with a lot of ambitions for the marine ﬁsh and shrimp segments, with a primary focus on hatchery diets. Phu Cuong Group is one of the largest business enterprises in Vietnam. The factory was built on an area of 30,000 m2. The plant is equipped with modern technology, including a cold storage system holding 800 tonnes of ﬁnished products; an advanced individually quick frozen (IQF) array with a capacity of 1 tonne of ﬁnished product per hour; and two IQF units with a capacity of 500 tonnes per day. Products sup-plied are black tiger shrimp and Paciﬁc white shrimp, from raw products to value-added goods. The compa-ny’s ambition is to reach an export turnover in 2020 of $20m per year, increasing to $30m and $40m in 2021 and 2022 respectively. This would place the company in the top 30 of seafood exporters in Vietnam. In Soc Trang, the Nong Ngu 14/10 Hoa Nho cooper-ative, comprising of 17 smallholder farms, recently achieved ASC certiﬁcation thanks to an aquaculture improvement programme (AIP) involving ASC, WWF Denmark, WWF Vietnam and VeriﬁK8, a company bringing technology to farmers to improve their environmental and socio-economic performance. The cost-sharing model included the Vietnamese proces-sor Taika and the Danish seafood company North-coast, who can now sell shrimp using the ASC logo.According to VASEP, in the context of the escalating US-China trade war, both parties have set up more barriers for imports of Vietnamese goods.For seafood products that China and Vietnam export to the US, such as shrimp, tuna, squid, octopus and marine ﬁsh, the US will examine those originating from Vietnam more closely.domestic industry newsindustry newscompliance with rules of origin to be tightenedaip leads to successful asc certiﬁcation PRICE OF PACIFIC WHITE SHRIMP IN VIETNAM (MEKONG DELTA)8.006.004.002.000.001 oct. 20181 jan. 20191 july 20191 oct. 20191 apr. 2019$/kgcount3060100 19shrimptails | vietnam sourcing update Next >
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