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Shrimp: global supplies, usage outlook and overview of changing conditions.

Shrimp: Global Supplies, Usage Outlook And Overview of Changing Conditions

The catching, processing and marketing of shrimp has grown to major importance during the past decade. Annual world production of ocean-caught and farm-raised species was reported to have been about 1,744,000 metric tons (live weight) in 1983 and an estimated 2,100,000 tons in 1988. Nearly 100 countries contributed to the total. About 60 nations produced commercial quantities large enough to enter the international trade picture.

Demand for shrimp continues to grow as the three principal markets - the United States, Japan and Western Europe - utilized about 54% of the world's live weight output in 1988 compared to 46% in 1983.

Ocean shrimp resources, for the most part, have reached their maximum annual production limits. Additional supplies have recently come on stream from shrimp farms, and this will continue. Cultured shrimp will play an increasingly important role in the market's future. Indeed, it has already altered the previously established characteristics of the markets.

The U.S. Market

The United States, which utilizes approximately 25% of the world's annual supply, is the largest national market for shrimp products. Despite heavy domestic production, the U.S. fishermen provide only about 30-35% of national supply requirements. Large quantities of foreign-caught shrimp must be imported annually to supply this market. The apparent usage of shrimp products in 1988 was nearly 310,200 tons, of which 229,000 were imported.

The annual production of shrimp in the U.S. has undergone significant change during the past two decades. Domestic landings were climbing annually until 1972, when the production of tropical shrimp began to decline. For four consecutive years, domestic output decreased. However, in 1976 landings surged upward, and 1977 followed with a record production year of 130,800 tons (heads-off). Landings have averaged about 92,000 tons per year since 1978.

The total annual landings' volume is not expected to increase in the United States in the future, as nearly all known shrimping grounds are fully or overharvested at this time. The fluctuations in annual landings of tropical shrimp are due primarily to the survival rates of young shrimp each year.

The annual volume of imported shrimp products - nearly all frozen, either shell-on (raw) headless or peeled and deveined (cooked and uncooked) - rose steadily until 1971. From 1972-81 the volume of imports fluctuated rather widely, up one year and down the next. The annual imports leveled off in the area of 90,000 to 100,000 tons during that period, but rose sharply in 1982 and 1983 and again from 1985-88. Receipts of shell-on headless shrimp have tripled since 1979, whereas peeled shrimp imports have increased only 35%.

Countries in Latin America and Asia are the chief sources of shrimp products imported by the U.S. Producers in Central and South America market nearly all their production for export to the United States. The growth in exports from this region has increased significantly in recent years with the expansion of shrimp farming. A prime example is Ecuador whose exports have increased dramatically, reaching 50,000 metric tons in 1987. Production and exports by Asian producers, led by China, are still growing as shrimp farm expansion continues in South Asia. Shipments from this region, for the most part, have been going to Japan, but sales to the U.S. and Europe are gaining in importance.

The volume of frozen shrimp held in public cold storage in the U.S. averaged about 24,000 tons per month during 1988 and is near that volume today. Shrimp supplies are derived from domestic landings, imports and inventories or holdings of shrimp in storage. The annual domestic production has shown no growth since 1977, and has averaged about 92,000 tons per year since 1978. The increase in available supplies during the past several years has come from and will continue to come from imports - mostly farm-raised species.

The demand for shrimp in the U.S. has been very strong in recent years due to the following factors: abundant supplies, weak prices, increased marketing effort, limited supplies of competitive products such as king crab and lobster, and an overall increase in demand for all seafood products.

The apparent usage of shrimp is determined by the volume of domestic landings, volume of imports, withdrawal or additions to storage, less exports. The 1988 apparent usage, on a product weight basis, was about 310,200 tons, representing the highest annual consumption to date. There has been a 92% increase in usage since 1979.

The prices of shrimp, whether ex-vessel (fishermen's price), wholesale or retail, are related to the size of the individual shrimp, the species, color, origin, quality and condition (whole, headless, peeled, etc.), as well as available supplies.

Large shrimp bring the highest prices because they are usually in short supply relative to demand, they require less labor to process, and are more acceptable for institutional use (restaurants, etc.). The prices by size for a particular species tend to run in concert with one another and seldom do prices of a small size go higher than the next size larger.

Shrimp prices in the U.S. used to follow a seasonal pattern of highs opposite of the volume of the domestic production which is at its peak in the summer and at the low point in the winter. Generally speaking, the highest prices were paid early in the year, from January through April. Import prices follow a similar pattern to domestic prices.

Expanding imports of semi-seasonal pond-raised shrimp are reducing the magnitude of the undulations in prices. The dependability of supply from shrimps farms is increasing sharp swings in price, to the benefits of producers, marketers and consumers.

The general trend in shrimp prices is about the same in Japan as it is in the U.S., indicating that shrimp is an international commodity. What affects prices in one market will to some degree affect the other markets.

U.S. domestic landings of tropical shrimp during the seven-month period January-July 1989, at 39,000 tons (heads-off-weight), were about 4,000 tons above the corresponding period of 1988, but 2,600 tons below the average for this period. Imports of shrimp in 1989 were running about 2% ahead of 1988 and 36% above 1985. Inventories of frozen shrimp, at 24,000 tons on July 31, 1989, were slightly above average.

The rate of apparent consumption of shrimp slowed modestly during early 1989, the usual seasonal trend, but should rise during the summer months. The demand is 23,000 tons (product weight) per month, but should increase to about 30,000 per month during the October-January period.

Shrimp prices, at both the wholesale and ex-vessel levels, were very soft during the May-November period. This condition reflected a more-than-adequate supply picture, relative to demand.

The U.S. has been the leading market for shrimp during the past eight years, having surpassed Japan in 1980. There has been considerable growth in the usage of shrimp during the 1980s in both total volume and per capita consumption, and this growth is expected to continue through the 1990s.

The annual usage in 1980 was about 180,000 tons; it increased to nearly 310,000 tons in 1988 and could rise to 540,000 tons by the year 2000. The per capita consumption advanced from about 0.77 kilograms in 1980 to 1.27 kilograms in 1988 and should rise, conservatively, to 2-plus kilograms by 2000.

This projected growth in usage will have to be supplied by imports because the domestic production of ocean-caught shrimp has reached its maximum annual yield. Domestic output will probably decrease over time as the economics of trawling, along with expanding government regulations on the fleet, will force many vessels out of business. Additional supplies to meet future market demands will come from imports of cultured shrimp.

The Japanese Market

The domestic landings of shrimp in Japan peaked in 1963 at 50,000 tons (heads-off weight). Thereafter, production drifted downward almost annually through 1988. During the past 10 years, some of Japan's traditional shrimping grounds off the coasts of China, the U.S.S.R. and Alaska have been closed to them. The annual landings have leveled off at about 31,000 tons (average 1979-88) and are not expected to increase of decrease significantly in the future.

The Japanese rely on foreign suppliers to fill 90% of their market needs. They have invested in numerous joint ventures in shrimp-producing enterprises in South Asia, Oceania, South America and Africa.

The principal importers of shrimp into the Japanese market are the trading companies which have offices in the shrimp-producing countries and are able to develop and maintain a close relationship with the farmers, fishermen, processors and bankers. Thus, the trading companies exercise a high degree of influence over the shrimp producers in Bangladesh, India, Indonesia, Malaysia, the Philippines, Taiwan, Thailand, Vietnam and other countries in the region.

In addition to investing the foreign shrimp projects and maintaining a close relationship with the producers, the Japanese pioneered the development of shrimp culture techniques and exported the knowledge to many nationals which are now producing shrimp for them and buyers in other world markets.

The inventory of frozen shrimp in Japan has been growing steadily since mid-1985, but in particular since early 1987, and recently totaled nearly 100,000 tons. This volume is equivalent to a 4.5 months' supply at the current consumption rate. This high inventory is of great concern to many, but its reduction may be difficult to accomplish because much of the product was purchased at values much higher than current prices. The trading companies, many of which bought on speculation, are reluctant to sell and take losses.

The apparent usage of shrimp in Japan has been growing annually since 1981, going from 179,000 tons to 273,700 tons during 1988. The per capita consumption has risen nearly three-quarters of a kilogram during this period and currently is the highest of the three principal markets.

Shrimp prices in Japan tend to follow the trends of the world market, but with occasional deviations which occur within the national market. The Japanese preference for certain species over others, and large shrimp over small sizes, affects prices to a different degree than in other markets; such as the U.S. where substituting species to obtain a lower price is common.

Black tiger shrimp were introduced into the Japanese market at prices below the traditional species. Initially they were used in tempura dishes where species is not an important factor. The taste and the low price encouraged consumption and because of the brilliant red and white color after cooking, black tigers became increasingly popular.

As prices moved higher, shrimp farm production increased to meet the growing demand. Production expanded in Taiwan and eventually throughout most of South Asia. This additional volume, along with rising production of Chinese whites, soon saturated the Japanese market and prices declined. The overflow was then directed to the U.S. market, again at low prices to gain market share.

Summer sales went well through July and August 1989, but the usage rate is expected to drift until the winter holidays when demand rises sharply for a few weeks.

Of immediate concern in this market is the persistently high inventory of frozen shrimp. The value of the nearly 100,000 tons in storage is estimated at $1-billion. Reports of some large wholesalers being in financial trouble has many dealers worried, and all are cautious about advance purchases. The market situation is not expected to return to more normal conditions until the holdings are substantially reduced.

Japan's annual usage of shrimp increased about 64% from 1980-88, rising about 106,000 tons. Although the total apparent usage was about 13% below that of the U.S. in 1988, the per capita consumption is estimated to have been about 2.23 kilograms, compared to 1.27 kilograms for the U.S.

Japan, like the U.S., depends heavily on foreign suppliers for the bulk of its shrimps. Most of the imports in the future will continue to come from South Asian producers such as Indonesia, China, Thailand, India and Taiwan. Even with a population growth rate of only about 1% per year, Japan's annual shrimp usage is projected to reach about 400,000 tons by the turn of the century.

Western Europe

The Europeans rely on local landings - mostly cold-water species from the North Atlantic Ocean - and imports to supply market needs. Some temperate species are found along the coasts of Spain and the northern Mediterranean Sea, but the greatest volumes of domestic shrimp are the pandalids from the North Atlantic.

The European Economic Community (EEC) imports large volumes of cold-water shrimp annually from Norway Iceland, Greenland and the Faeroe Islands. In addition, shrimp has been imported from countries in Africa and South Asia for several decades. A high percentage of the imports of small shrimp, cold-water or warm-water species, are reprocessed and sold to other countries within and outside the EEC. Denmark exports almost as much shrimp as it imports each year. There is a substantial amount of shuffling of products between and among the various nations of Western Europe, as well as imports from outside the region, which can confuse the true market picture.

Because of former colonial ties, the French tend to favor tropical shrimp from Africa (Senegal, Gabon, Madagascar and Sierra Leone), the British are in the habit of buying from South Asian countries (India, Pakistan and Bangladesh), and the Spanish from North Africa and Central and South America. West Germany imports mostly from other EEC countries, plus Iceland, Norway and the Faeroes.

The demand for shrimp in western Europe has been rising also, but at a slower pace than the other two markets. The total annual usage in the EEC increased from about 120,000 tons (product weight) in 1983 to over 200,000 in 1988.

The product forms and species preferred in Europe differ to some degree from those consumed in Japan and the U.S. where processors and restaurateurs like the raw headless, shell-on products. In the EEC, the preference, depending upon the country, is for whole raw shrimp or cooked and peeled products. Frozen headless shrimp is not yet well accepted in this market. The southern Europeans traditionally buy medium sizes of whole raw shrimp, whereas in the northern countries the preference is for the small cold-water species, cooked and peeled.

The market for cultured shrimp, whole raw frozen products, is developing in Western Europe and is expected to expand gradually over the next decade. Exports from Brazil and Ecuador are finding increased interest in Spain, one of the principal seafood-consuming nations on the Continent. Black tiger shrimp from India, Indonesia and Thailand, and white shrimp from China, are making headway in some national markets in the EEC.

Shrimp usage in Western Europe was relatively low during the first four months of 1989. The weather and the season have an impact on shrimp consumption in this market and demand does not usually improve until Easter. The cold-water shrimp season gets under way during May/June, and heavy usage follows. The summer period, when most Europeans are vacationing, is when consumption peaks. Each year imports rise to help fill the growing demand and a growing share is farm-raised product.

Black tiger shrimp were introduced into western Europe about two years ago and have been gaining market share ever since. The very low prices have encouraged black tiger imports and the large head-on and some headless products moved well this year into Italy, France, Belgium, Germany and the United Kingdom. Indian black tigers, head-on, have found steady buyers in Spain and France, but many French restaurants prefer the raw whole Indonesian black tigers. China whites are reported to represent 13% of the warm-water imports into the U.K. at this time, but were unknown in this market as little as two years ago.

Shrimp usage has been on the rise almost annually in Western Europe over the past decade, and is projected to increase by almost 57% or 107,000 tons by the year 2000; almost all of the increase will come from imports, most likely farm-raised products.

Global Projections

The annual world production of ocean-caught and farm-raised shrimp, was reported to have been 2,028,000 metric tons (live weight basis) during 1987 and an estimated 2,100,000 tons in 1988. About 60 countries produced commercial quantities large enough to enter the international trade picture. Output is projected to increase to about 2,700,000 tons by the year 2000.

The world population, estimated at 5.1 billion in 1988, is expected to increase to about 6.2 billion by 2000. The supplies of shrimp available in 1988 provided about 0.411 kilograms per individual. Allowing for a very conservative rise in apparent per capita consumption over the next 12 years, the supplies of shrimp necessary to fill world demand by the turn of the century will be about 2,700,000 tons.

Ocean-caught shrimp resources, for the most part, have reached their maximum annual production limits. Additional supplies needed to fill future demand will have to come from shrimp farms. Cultured shrimp will play an increasingly important role in the major markets and ocean-caught shrimp a lesser role as production costs will bring about a gradual attrition to most shrimping fleets in most regions.

Global production of cultured shrimp is growing at a rapid pace, going from less than 1% of annual supplies in 1980 to an estimated 20% in 1988 and a projection of nearly 43% by 2000. The principal producing countries today are the People's Republic of China and Ecuador. However, Thailand, the Philippines, Indonesia, Vietnam, India, Bangladesh, several states in Central and South America, Australia and some African countries, are planning significant expansions in shrimp farming. Taiwan, which has been a major producer, is trying to recover from serious setbacks in pond culture in 1988. This rising production is necessary as the world's production expands, requiring additional product. The demand for all seafoods is increasing rapidly as consumers seek more low-fat foods, and cultured shrimp is an ideal product for this purpose.

Future increases in farm-raised shrimp production will come from countries in the tropical regions of the world such as South Asia; from Thailand, Indonesia, Vietnam, India, Bangladesh, the Philippines and Burma. China's production will continue to rise as farms are developed in the southern regions where more than one crop a year can be produced. The greatest potential area in South America is in Brazil which has extensive regions available for development and an abundance of low-cost labor. Central Africa will not come on stream in any significant volume for many years. The United States will probably never be a major producer of cultured shrimp because of the high cost and demand for coastal property, high labor costs and and its temperate climate. The countries in the tropical zones which have the lowest operational costs will be the dominant shrimp producers in the future.

Conclusions

The combined usage of shrimp in the three principal markets during 1980 was about 450,000 tons, or nearly 45% of the world production. In 1988 it had risen to 773,000 tons, or 61%; by 2000 these markets will require nearly 80% of the expected production of 2,700,000 tons, unless shrimp farming expansion increases much faster than these projections indicate.

Aquaculture has removed shrimp from the list of luxury sea-food items. Now a commodity similar to chicken and hamburger, shrimp will be available all year long and at reasonable prices in the foreseeable future.

The shrimp market is currently supply-driven and will remain so for the next several years. Therefore, the challenge today and tomorrow belongs to the shrimp marketers, not the producers.
COPYRIGHT 1990 E.W. Williams Publications, Inc.
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Title Annotation:QFFI's Global Seafood Magazine
Author:Peckham, Charles J.
Publication:Quick Frozen Foods International
Date:Jan 1, 1990
Words:3301
Previous Article:Drought, disease and typhoons in China make 1989 a trying year for aquaculture.
Next Article:Don't despair, shrimp future is bright as long as retail mass-marketing grows.
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