magazine for sustainable sourcing and market intelligence66 united statesmarket update38 rabobank’s investmentin Blueyou’s Selva Shrimp®48 market diversificationSingapore’s high-end shrimp marketniche markets and products in the global shrimp industry#2 June 2018recovery of paciﬁc white shrimp prices only temporary? Powered by©2018 Stichting Seafood Trade Intelligence Portal (STIP). ShrimpTails is an STIP (www.seafood-tip.com) publication and has four issues per year.25 June 2018disclaimerLimitation 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. In the event a User and/or its organization or employer makes a business, trading and/or investment decision based on the information provided through ShrimpTails magazine and its Platform, this is the sole responsi-bility of the User and/or its organization or employer. STIP is not liable for damages of any kind, whether direct or indirect, arising out or related to the use of ShrimpTails magazine and its Platform, except to the extent the liability arises from the gross negligence or wilful misconduct of STIP. 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)Editorial Assistant Sander Visch / STIP (NL) Editors Annette van Tits, Jo Hamilton-Bilijam, Josanne Blokker, Ursula Beer & Bas Bilijam / Editors Collective Amsterdam (NL)Contributors Jasmijn Venneman / STIP (NL), Adeyemi Ademiluyi / STIP (NL), Michelle Homans / STIP (NL), Nikki den Boon / STIP (NL), Alban Caratis / Fresh Studio (VN), Lida Soeda Pet / Hatﬁeld International (ID), John van Herwijnen / Open Europe (ES), Teresa Kus / Consultant (PL), Donelson Berger / SEADEX (US), Mazhab Uddin / Consultant (BD), Shameem Ahmed / Solidaridad (BD) & Aquaconnect (IN)Graphic & Illustrative design Marnix de Klerk & Nina Mathijssen / Detour (NL)Website support Mathijs van de Venne / Everweb (NL)Support Bram Verkerke / Solidaridad (NL)Photo credits Cover photo, p. 39 & p. 40 by BlueyouAdvertising and sales Jasmijn Venneman / STIP firstname.lastname@example.org t +31 6 40 81 33 61 silver membersShrimpTails and Seafood Trade Intelligence Portal are powered by Solidaridad Network. contents05 editorial 32 a traveller’s account of the brussels seafood expo06 introduction to sourcing updates34 lenkyour seafood partner in Asia50 fishcoin30 nigerian white shrimpas big as it gets44 the sustainable shrimp partnershipclarifying some critical questions71 us shrimp now alsounder simpthe practical implications46 idha new aquaculture strategy48 market diversificationSingapore’s high-end shrimp market64 the us organic shrimp marketa niche with a 45,000 tonne potential69 the 200 million brazilian consumer marketwill prices slump?63 storied seafood38rabobank’s investmentin Blueyou’s Selva Shrimp®15 the pink gold from the red islandthe story behind Malagasy shrimp22 irana new source of Paciﬁc white shrimp for the EU?54 southern europe52 introduction to market updates08 vietnam60 north-western europe66 united states18 india26 bangladesh36 indonesia42 ecuador56interviewwith a seasoned shrimper12 extensive black tiger shrimpa “Good Alternative”?columnsourcing updatesmarket updatesadvertorialsin-depth tailsinterviews04shrimptails | editorial 05shrimptails | editorialIn early April, just after releasing the ﬁrst ShrimpTails and while discuss-ing the theme of the second edition, no one knew that we were entering a period of one of the worst Paciﬁc white shrimp and black tiger shrimp price slumps in recent years. Although it was already clear in March that importers around the world had high stocks left after Christmas, we expected that these would be sold during spring and that demand would pick up in April and May. We couldn’t have been further oﬀ. In March and April, prices slumped due to high supply on the one hand and weak demand from most markets on the other. Since early June, prices have started to recover slightly – but for how long? While I hope I’m wrong, I’m afraid we might see another price drop from September onwards if supply from Asia increases again with September harvests and if markets by that time show a weaker de-mand than expected, putting the industry under pressure once more. This edition of ShrimpTails discusses the current shrimp price crisis, while also taking you on a journey along niche markets and products in the global shrimp industry. Contrary to mainstream products and mar-kets focused on high volumes and low prices, there’s a higher priority on quality and sustainability for niche markets and products - such as large-sized black tiger shrimp in hotels in Singapore or organic certiﬁed shrimp in the US – quality and sustainability have a higher priority. In these markets, consumers are willing to pay a premium for a high-quali-ty and/or sustainable product. This premium paid by consumers encour-ages the sector to continue investing both in the ecosystems where they produce their shrimp and in the supply chains that bring these products to the markets. I hope this issue of ShrimpTails inspires you to think about whether you want to invest in niche products and markets in order to contribute to a sustainable future for our industry.Willem van der PijlDirector Seafood Trade Intelligence Portal editorial 06shrimptails | shrimpin’ ain’t easy06shrimptails | sourcing updates introductionthis second edition of ShrimpTailS for 2018 contains sourcing updates on vietnam, india, bangladesh, indo-nesia and ecuador. they provide the most up-to-date information in the form of a review of the previous 6 months and an outlook for the rest of the year. they include detailed regional information for each coun-try, as well as country-wide production and export trends, company news and international trade news, amongst other relevant topics.also those of black tiger shrimp (P. monodon). It is clear that increased production as a result of newly es-tablished farms in freshwater areas in Andhra Pradesh, India, as well as in other states along India’s east and west coast, played an important role in the bumper harvest, which began in March and April this year. The price slump that followed, combined with reports of disease outbreaks which resulted in slow growth, drove farmers to harvest early and to harvest mainly small sizes (100 count per kg and small-er). These events in India triggered similar responses in Vietnam and Indonesia, where farmers also wanted to limit their losses. Harvests in India came to an end in early June. A reduced supply of raw materials combined with price con-trol measures imposed by the Indi-an government have resulted in the stabilization of prices in India as of the ﬁrst week of June. Although Vietnam lagged a couple of weeks behind India, prices of Paciﬁc white shrimp in the Mekong Delta have also started to recover slightly since early June. This is a response to re-covering prices in India, but is also a result of improved demand on one introduction to sourcing updates The main theme of the ﬁrst Shrimp-Tails edition was high targets vs. realistic expectations. It was pub-lished in March 2018 and reviewed the shrimp industry’s performance throughout 2017 and provided an outlook for 2018. We reﬂected on the high production targets set by countries like India, Vietnam and Indonesia and found these set targets to be somewhat optimistic, perhaps even unrealistic, at the time of publication. We mentioned that even if these countries were to meet only a fraction of their targets, the industry and global market would experience an increase in the supply of Paciﬁc white shrimp (L. vannamei) in particular. We allud-ed to the fact that, at that point in time, it was not clear whether the market would be able to absorb an increased supply of shrimp if these ambitious targets were indeed to be met. We also predicted that such a trajectory could impact prices. In this second edition of Shrimp-Tails, we can safely say that the ﬁrst half of 2018 has delivered on these forecasts: there have been signiﬁcant year-on-year increases in supply from most producing countries, but especially from In-dia, Vietnam and Ecuador, and the market was not able to absorb the volumes available without letting prices slump. looking backOversupply in the first fOur mOnths Various factors contributed to an oversupply of shrimp, especially of small-sized Paciﬁc white shrimp. This oversupply has ultimately driven the overall prices of all sizes of Paciﬁc white shrimp down, but Willem van der Pijl 07shrimptails | sourcing updates introductionhand and harvest slowing down on the other hand. Not only Asia produced big vol-umes: sources in Ecuador also re-port a 20% year-on-year increase in shrimp production in the ﬁrst ﬁve months of the year. looking aheadslOwer supplies during summerAs a result of the extreme slump in prices, in April and May, farm-ers across Asia were selling at rates far below their production costs. Protests as a response to this by farmers in Thailand and India have triggered exporters and governments in these countries to take measures to support the farmers by controlling produc-tion costs and to ensure that they receive minimum prices for their products. These measures include reduced charges for electricity and feed in Andhra Pradesh, India, and minimum price agreements between exporters and farmers in both India and Thailand. With these measures in place, prices have started to recover slightly.ShrimpTails sources across Asia report that after harvesting the previous crop in April, May and early June, instead of starting to restock in June, many farmers have decided to delay stocking their ponds for the next crop until July. This so-called “crop holiday” may result in a decrease in supply during the summer months and may consequently contribute to prices recovering somewhat over the coming months. The main questions now pending are when and at what scale farmers will begin to stock again. pOssible bumper harvests in asia frOm september OnwardsThe ﬁrst signs of market recov-ery are visible and prices in some countries, such as India and Thailand, seem to have stabi-lized. ShrimpTails sources in India suggest that farmers in Andhra Pradesh are likely to start stocking their ponds from July onwards. This move is likely in anticipation of the traditional buying season for Christmas and the Chinese New Year, which begins end of August or beginning of September. If farmers in Andhra Pradesh and other parts of India, as well as in other countries such as Vietnam and Indonesia, begin stocking again in July, major harvests of smaller sized Paciﬁc white shrimp can be expected from September onwards. Keeping the increased capacity of Asia’s shrimp farming sector in mind, even if farmers stock at moderate densities, September harvests may turn out to yield more than some media reports have suggested. The impact of the September harvests on prices will not only depend on their volumes but also on whether major buyers from the US, China and Europe have by then rid them-selves of surplus stocks and once again ﬁnd themselves in a position to purchase the traditional large volumes typically associated with the festive season.farm gate price trend fOr threesizes pacific white shrimp frOmandhra pradesh, indiadec. 2017feb. 2018apr. 2018jan. 2018mar. 2018may. 2018june. 20185004003002001000prices (inr/kg)100 Count 100 Count 60 count 80 count 30 count 50 count farm gate price trend fOr threesizes pacific white shrimp the mekOng delta, vietnamdec. 2017feb. 2018apr. 2018jan. 2018mar. 2018may. 2018june. 2018200150100500prices (vnd ‘000/kg)India: powered by Aquaconnect Vietnam: powered by Fresh Studiosourcing updatevietnamthe current shrimp price crisis – one of the worst slumps ever – has also hit vietnam. farm gate prices in vietnam were acceptable until early april, but then plunged be-low acceptable levels. prices have now declined 15-20% since the beginning of april. while prices declined, farm-ers continued to stock their ponds intensively until the end of april. in order to minimize their losses, farmers shorten their production cycle and harvest early, put-ting high volumes of smaller sizes on the market until the end of June. although prices have started to recov-er, farmers are still uncertain about whether this re-covery will be permanent, and are currently not stock-ing at all or only at moderate densities. this may have a negative impact on harvest volumes in the second half of 2018. mekong deltaca maumekong deltaMekong Delta farmers stocked early this year. Many have already harvested the ﬁrst crop in April and May. Traditionally, the Paciﬁc white shrimp export market from the Mekong Delta only takes oﬀ from mid-May, when Western buyers start to purchase. Compared to 2017, Chinese orders in April and May are much less signiﬁcant. With farmers having anticipated the next purchase season but with Western buyers taking their time to place orders, the situation is becoming critical, especially for those farmers that only recently entered into business.The contribution of Ca Mau’s black tiger shrimp (P. monodon) to the national export revenue in the ﬁrst quarter kept decreasing (it declined with 9% compared to the ﬁrst quarter of 2017) as farmers transitioned to Paciﬁc white shrimp. Prices for black tiger shrimp in Ca Mau followed the trend of Paciﬁc white shrimp prices and started to drop in April. looking back looking back looking ahead 08shrimptails | vietnam sourcing updateca mauca maulooking ahead Fresh StudioCa Mau should overall follow the developments in the Mekong Delta. Prices of black tiger shrimp in the province could be the ﬁrst to recover because more farmers have transitioned to Paciﬁc white shrimp, resulting in a shortage of black tiger, and because black tiger prices are in general less aﬀected by the crisis than those of Paciﬁc white shrimp. With prices likely remaining much lower than previous years, the next 4-6 months are expect-ed to be diﬃcult. As a result of early harvests, there is a good supply of small-sized Paciﬁc white shrimp (100-150 count per kg), but any demand for larger counts will be diﬃcult to meet. Moreover, disease outbreaks in the Delta reported in May could also constrain supply in the second half of the year.Semi-intensive farmers in the Delta may concen-trate more on black tiger shrimp because the market for it is in somewhat better condition. For example, farmers in the Long An and Sóc Trang provinces, who usually begin the season with a crop of Paciﬁc white and ﬁnish with a crop of black tiger, may skip the ﬁrst and instead stock black tiger earlier. This way, the supply of black tiger shrimp may rebounce slightly by the end of this year 09shrimptails | vietnam sourcing updatecentral vietnamcentral vietnamlooking back looking aheadInvestments made in the farming sector in 2017 and better weather conditions resulted in good harvests in the ﬁrst part of 2018. When surveyed by Fresh Studio in April and early May, only a few farmers decided to harvest early. Others continued to grow their shrimp, hoping for better prices come June. It wasn’t until May, when prices slumped, that farmers started to worry, which resulted in early harvests of small-sized shrimp. Not only farmers, but also some exporters ﬁnd themselves in trouble with high stocks that they’ve purchased at higher rates than the current market rate. For instance, the 100 count per kg Paciﬁc white shrimp (L. vannamei) from Vietnamese farms were worth $3.9/kg back in March-April, but fell to $3.2/kg in Vietnam and to $2.5/kg in India in only 4 weeks. There has been speculation about some processors taking advantage of the situation by postponing their sourcing to put pressure on farmers and waiting for prices to drop even further. While stocks of factories are claimed to be high, the import value from India between January and March still grew by 9.9% year on year according to VASEP, indicating that Indian shrimp was even cheaper than Vietnamese shrimp.The harvest peak of the current crop will take place in June and July. Under the current conditions, early harvests of smaller sizes are expected. The next crop, normally stocked from mid-June to early July, will certainly mark the pace for the rest of the season. If demand doesn’t pick up, many farmers may not culture at all or stock at lower densities, resulting in low shrimp harvests from August to November when demand of raw materials from processors is normally highest because of the upcoming Christmas season. looking backsimpeu audits yellow cardlooking aheadIf demand has recovered by then, prices are expected to bounce back, although the summer’s outcome will mainly depend on the situation in other countries such as India and Indonesia.Last March, the US Department of Commerce (DoC) announced that it would impose anti-dumping duties at a 25.39% tariﬀ on 33 Vietnamese shrimp exporters, with another 30 importers subject to review. VASEP requested a review of the DoC decision soon after one exporter claimed to have found an error in the DoC’s calculations. The DoC subsequently proposed to send a delegate to Vietnam in September to assess the com-plaint. However, on 1 May the DoC nevertheless con-ﬁrmed a 5-year extension of the tariﬀ. This will result in a decrease of exports from Vietnam to the US. One of the few companies that remain unaﬀected is Minh Phu, which has enjoyed free trade since the company won a lawsuit for anti-dumping duties against the US in 2016. In the wake of the tariﬀs, Minh Phu saw its export revenue increase with 14% in the ﬁrst quarter of 2018 compared to 2017 and also observed a 138% increase in proﬁts after tax. international tradeus anti-dumping resultsAnother cause of headache for Vietnamese exporters is the imple-mentation of the US Seafood Im-port Monitoring Program (SIMP). Because it is not only diﬃcult for Vietnam to register all its small-scale shrimp farmers but also to ensure traceability to farm level for the shrimp they import from other countries, many Vietnamese exporters will likely turn away from the US even more.On 23 May, EU inspectors completed a 9-day ﬁeld assessment of measures taken by Vietnam to combat illegal, unreported and unregulated (IUU) ﬁshing. This marked the end of a 6-month period meant to address concerns highlighted by the European Commission last October. The Vietnamese are conﬁdent that the measures they have taken as well as establishing an Trends in the central region resemble the overall situation in the rest of the country. However, shrimp prices remained stable following the Vietnamese New Year and were on average higher than those in the Mekong Delta by about 10,000-20,000 Vietnamese dong/kg ($0.44-$0.88). Shrimp from this region has a speciﬁc meaty quality which particularly suits demand of niche markets in China and Japan, where 75% of last year’s production was sold for top dollar. The production trend in Central Vietnam is expected to follow national trends. It is how-ever not clear how the market will respond. Indeed, while 75% of the Paciﬁc white shrimp from this region in 2017 was exported to China and Japan, Chinese and Japanese buyers have been strangely absent so far this year. European buyers focus more on the Mekong Delta where production costs are lower. It is unclear where Central Vietnam will export to when Chinese buyers will not return.Next >
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