So noted industry leaders speaking at the Global Shrimp Forum’s penultimate panel, who agreed that the next three to six months will be marked by uncertainty, particularly in the US market, where tariffs – especially the 50 percent tariffs that have been slapped onto Indian shrimp imports – will slowly reshape supply chains.
Panellists warned that US importers and consumers should prepare for significantly higher costs in the near term. With tariffs pushing up prices and lower-cost inventories dwindling, importers are bracing for the reality of paying more.
Urner Barry’s Angel Rubio noted that a 10 percent price increase typically leads to a 3-4 percent decline in consumption within 14 months, adding that if shrimp costs rise by 20-30 percent, consumption could drop sharply, adding pressure on the industry.
The challenge, participants stressed, is that costs are climbing faster than retail prices. Unless consumers accept higher menu and supermarket prices, suppliers may face squeezed margins.
As India faces steep US tariffs, buyers are looking to alternative suppliers – such as Ecuador, Indonesia and Vietnam. Yet capacity constraints limit how quickly these countries can fill the gap. Indeed, while Ecuador may have expanded its peeling capacity fivefold in recent years, they will not be able to replace India overnight – not least because consumers in the US prefer peeled, ready-to-cook and value-added shrimp products over traditional head-on offerings.
As Gabriel Luna explained: “Let's say that an American customer buys 100 containers from India every month. And this time he says, ‘Ecuador, I need 100 containers from you’. We can probably answer… I'm not going to give you your hundred. I'm going to give you the eight that I was giving you before. I'll give you two more because you're asking nicely. And I'm going to make a really good effort to train some people to peel more shrimp immediately… So the takeaway is you, the importer will have to go back to India. Ecuador has been gearing up for greater value-added production, but scaling up remains a long-term process.”
Indonesia also faces limits. Despite steady demand, its historical output of around 200,000 tonnes cannot suddenly be increased by 50 percent to cover US shortfalls. Instead, panellists suggested that importers will rely on “blended costs,” sourcing from multiple countries to average out tariffs and prices.
India, while facing reduced access to the US, is expected to redirect some supply to alternative markets such as China. This may help stabilise global balances, though panellists cautioned that the redirection will take time and that China’s demand growth has slowed to low single digits.
Meanwhile, panellists pointed to Europe as a surprising bright spot in 2024 – with Spain, Italy and France all posting record imports – and this might benefit Indonesia, not least due to its recent trade agreement with the EU.
However, for now, the industry is bracing for more volatility. As Undercurrent’s Gary Morrison summed it up: “Everyone throughout the supply chain needs to work together to get through this next three to six months and then allow the trade to normalise a little bit… But then there'll be some other obstacle to deal with.”
