However, as price control is exercised carefully to avoid consumer backlash, the catering and retail trade have moved to make cheaper products available to end consumers.
Subsequently, demand for large sizes shrimp did not improve much during the Golden Week festival compared to the previous years. The festival demand for X–large sizes namely 6/8 through 13/15 was disappointing for the catering trade.
Imports during the first quarter of the year fell behind last year’s. Shrimp prices at wholesale trading; however, were stable during this period following reduced imports during the first quarter of the year.
MARKET TRENDS
The H1N1 flu (known as Mexican flu in Japan) alarm has created mixed trends in the market. Due to the health scare, people are avoiding going out, which is hurting the already soft restaurant trade. Supermarkets, on the other hand, report increasing sales of frozen food including processed and prepared shrimp as more meals are prepared or eaten at home. Usage of cooked and peeled shrimp has increased at pizza outlets.
Due to the shrinking business in the catering trade, imports of sushi shrimp will be lower this year. Less traveling during this summer holiday will also take a toll on the already affected catering trade.
In a seasonally dull market in hot and humid summer, trading is sporadic for small lots and selective sizes at wholesale/distribution level. Prices have weakened further for 16/20 counts b/tiger shrimp, for which demand is extremely poor and local stocks are high. This downward price movement also affected prices for the mid- range counts (21/25 and below). Supply shortage from Kolkata area may reverse the situation. Supermarket demand for frozen vannamei is better; prices are under pressure due to improved harvests in southeast Asian countries.
Processed shrimp: Household demand has improved for frozen cooked and prepared shrimp. Usage of pud/p&d, and PTO has also increased at food delivery services; vannamei shrimp sells better due to the price factor. However, demand for sushi shrimp (vannamei) from the Kaiten sushi chains is seriously affected by the slowing restaurant trade.
Import/Export Trade: Lack of real demand in the market have weakened prices of 16/20 counts headless shell-on black tiger shrimp. Japanese buyers’ demand is more for sizes 21/25 and below for which prices are stable as supplies of these sizes are still limited in producing countries. By late May price of Vietnam origin 16/20 fell by US$ 30-50 cents/kg, as shipments consisted more of the large sizes. However, supplies of the preferred mid sizes have improved from this source. But imports from Kolkata (India) packers are affected because of the following the cyclone in late May.
SUPPLY
Myanmar: Black tiger shrimp harvest in Myanmar is forecast to be lower than last year. The farming season has started in April/May but there is very little interest among the farmers practicing semi-extensive aquaculture as the leading market Japan remains unattractive to them. Subsequently black tiger shrimp hatcheries are inactive and many farmers have shifted to soft-shell crab aquaculture. Only extensive farms practising ‘catch and hold’ operations are expected to produce farmed black tiger shrimp this year.
India: As of 1 April 2009, the Government of India has introduced a new ruling which allows only antibiotic-free certified farmed shrimp to be processed for export markets. The authorized laboratories of the Marine Products Export Development Authority of India (MPEDA) will be responsible for checking and certifying according to the required quality (antibiotic-free) standards of farmed shrimp for exports. Meanwhile, in the southwestern shrimp farming belt, many farms producing black tiger shrimp, are getting fully integrated (hatchery/ feed mill/ grow out) to guarantee antibiotic-free harvests.
To meet their Japanese importers requirement, farmers in West Bengal (Kolkata) have started to produce more medium counts (21/25 counts and below) of black tiger shrimp. But in late May, farming in this area has been seriously damaged by the cyclone Aila. High tidal waves, caused damage to 50-60 per cent of the farms and infrastructure and washed away crops which were in the middle of the peak farming season. In southern India, raw material supplies are still lower than expected.
Bangladesh: Black tiger shrimp farms in Khulna/Shatkhira area in Bangladesh are also seriously damaged by the cyclone Aila.
Vietnam: Discouraged by the falling prices of shrimp in the export markets, black tiger shrimp production is scaled down in the southern provinces of Vietnam. As of end March, nearly 8 per cent of the farming area in the country was not prepared for the new season. The most affected provinces are Ca Mau and Bac Lieu where many processing plants are forced to reduce their production by 35-40 per cent. Harvests of black tiger shrimp from this areas are mainly consisted of larges shrimp for which consumer demand is very weak in Japan.
On the converse, there is a surge in farming vannamei shrimp in the southern provinces. This year vannamei production may reach 100 000 MT in Vietnam.
Thailand: Overall production of farmed shrimp dropped 15 per cent during January-March 2009 compared to the same period last year; According to the country’s Shrimp Farmers Association, this year’s production may come down to 392 000 MT compared to 490 000 MT harvested last year. The production cut will be more for vannamei, compared to the black tiger shrimp.
Indonesia: The disease problem occurred in some farming vannamei areas is reportedly under control. Some government sources indicate that overall production may increase by some 20-30 per cent this year. However, with further strengthening of Indonesian Rupiah against the US dollar, current prices in the export market do not compensate the raw material prices. Last year 300 000MT of farmed shrimp were harvested in Indonesia.
IMPORTS
Compared to last year, cumulative imports of shrimp during January-March 2009 increased by three per cent to 566 396 MT against the same period last year. In the coming months, supplies for semi-processed and processed vannamei from Thailand are expected to increase compared to shell-on products. As for black tiger shrimp, market demand for 21/25 and smaller counts will persist.
OUTLOOK
In the international arena, import volume and prices will be largely influenced by the economic situation in the country. Price and convenience will continue to be the key factors affecting consumer demand for the rest of the year in Japan. Consumer spending in Japan has reduced to an extent not witnessed in recent history. However, the increase in home meal preparation is expected to improve household demand for shrimp; semi-processed and processed shrimp will benefit more from this development.
Requisitions from restaurants will be lower than last year due to the downward trends in business. The scheduled marketing plan for the coming summer holiday may also be affected, if the “H1N1 flu” scare prolongs longer.
September 2009
