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European ban on Asian shrimp imports puts even more pressure on prices: prices for farm-raised shrimp could fall through floor, as supplies are expected to build with no place to go except the USA market. Look for big summer promotions to "move mountains." (QFFI's Global Seafood Magazine).

How low can prices go? That's what shrimp buyers and sellers alike want to know. The consensus among those in the shellfish trade gathered at the International Boston Seafood Show in March was that retail prices in the United States could drop to $4.99 per pound if the "mountain of shrimp" bound for the market arrives as expected.

Likening the confluence of events in today's chaotic marketplace to the rare occurrence of "a 100-year flood," Dave Light, managing director of national accounts for Ocean to Ocean Seafood, said that this summer will afford an opportunity to promote shrimp like never before. "A number of extraordinary circumstances" are putting extreme pressure on shrimp prices, he noted.

For starters, the chronically stalled economy of Japan la country where per capita consumption of shrimp is the world's highest] shows no sign of recovery any time soon. Hence demand will continue to be soft.

Add to this the fact that the European Union (EU) has slammed its doors on imports of shrimp from China and parts of Southeast Asia because traces of chloramphenicol and nitrofurans have been detected in shipments. As such, the only destination of importance for surplus production is the United States.

At a time of rising farm-raised shrimp output in Asia, the question is: How much of it will Americans be able to eat? The USA imported 400,453 metric tons in 2001 -- up 16% in volume, though slipping a bit in value to $3.6 billion.

Vietnam -- which became the second largest supplier of shrimp to the United States after boosting exports a whopping 560% last year to 33,267 tons -- is poised to further penetrate the market.

Dr. Nguyen Huu Dung, general secretary of the Vietnam Association of Seafood Exporters and Producers, voiced frustration over the EU's apparent lack of uniforurm inspection testing standards at ports of entry. There are different rules in different corm[des, he complained. As such, imports clearing Customs at one location might well be rejected at another port.

"We have limited our exports to Europe," said Dung, who complained that EU authorities have provided no clear guidelines regarding acceptable levels of chloramphenicol residue. In effect the tolerance is zero, which means that inspectors identifying chloramphenicol at levels as low as 0.01 parts per billion (ppb) must reject entire shipments on this basis.

According to Dr. George W. Chamberlain, president of the Global Aquaculture Alliance, much of the shrimp testing positive for chloramphenicol in the EU would be allowed to emer the USA. That's because the US Food and Drug Administration (FDA) permits levels of up a five parts per billion.

American authorities have not red-flagged shrimp imports for excessive amounts of chloramphenicol residue in some time. "We have been testing for the past five years and found only seven incidences," said the FDA's Mary Snyder, director of the office of seafood division of program and enforcement policy.

When asked if the uproar over chloramphenicol residue in Europe may cause the United Sates to lower its tolerance level, Snyder replied: "I hope not. It would be better to do a risk assessment."

Chamberlain was glad to hear that. On March 13 he chaired a Global Aquaculture Alliance meeting in which the organization authorized the creation of a third-party certification program whereby shrimp farms and processors would be accredited for operating in a manner in which 100% traceability -- from egg to table -- is guaranteed.

"Even if chloramphenicol is completely eliminated from aquaculture, the possibility exists for continued rejection of products caused by background contamination that has no consequence to human health," said Chamberlain. "Quantitative risk assessment is needed to establish maximum residue limits (MRLs) and standardize residue-testing protocols for chloramphenicol. This is the responsibility of the Joint WHO/FAO Expert Committee on Food Additives (JECFA). Once established, the standards can be adopted by the FAO/WHO Codex Alimentarius Commission as an international reference for food safety."

The current emergence of the chloramphenicol issue in Europe is partly due to the standard of "zero tolerance" set for the drug, he pointed out. Given the increases in technology for detecting trace levels of drugs, it may be unrealistic to specify that residues be completely undelectable.

Just how chloramphenicol [a substance which is thought to cause leukemia in one out of 20,000 exposed human beings] is getting into the food supply is debatable. Shrimp producers deny using the prohibited antibiotic as a means to reduce or treat infectious disease in farmed product.

"My country has banned chloramphenicol for more than a decade," said Dr. Kantathi Suphamongkhon, Thailand's trade representative to the USA. "Thai shrimp is guaranteed to be free of hazardous residues."

Some observers have put forth the notion that residue may be coming from topical skin lotions used by workers in developing countries to treat cuts and guard against bacterial infection. Another explanation is thai minute quantities of the drug are simply part of the global environment, since trace amounts are found in wild-caught as well as cultured shrimp.

The chloramphenicol issue came to the forefront in Europe last autumn after samples of shrimp -- which were pulled from supermarket shelves in Austria at random by members of the environmental group Greenpeace -- tested positive for the antibiotic. Recalls of product from retail distribution channels soon followed, causing chaos among wholesalers, processors and importers who received no guidelines from government authorities as to how to deal with the crisis.

"We are all jumping in the dark over the chloramphenicol problem," Heiko Lenk of Pesban Frozen Foods GmbH told Quick Frozen Foods International at his Hamburg office in February. "I have cancelled all shrimp orders from Vietnam for the time being."

By March the crisis took a new turn in the United Kingdom, when another suspected carcinogen began showing up in shrimp packed for retail sale. According to a statement from Britain's Food Standards Agency, "Sixteen out of the 77 samples of shrimp and prawns tested positive for illegal residues of nitrofuran drugs."

The substance, used to kill microorganisms, is banned for use in food production throughout Europe. A number of prawn products sold by Tesco, Iceland and Safeway were quickly removed from stores. Tesco, which went to the trouble of publishing a "Product Recall" ad in newspapers, specifically asked consumers to return raw headless tiger prawns, cooked and peeled tigers in 200g and 400g packs, and party bites prawns rings in 305g packs.

The advertisement read, in part: "Tesco is taking the precautionary measure of recalling the above products. Tests have shown that the products do not comply with our stringent safety and quality standards ... Customers who have bought the above products are requested to return them to any Tesco store where a full refund will be given."

As distributors and further processors scrambled to cope with the crisis on the ground, importers with incoming product on the water were fearing the worst. "This could affect hundreds of containers of shrimp already in transit," a major UK importer told this magazine. "The potential for financial ruin for exposed companies without a strong economic base or a very understanding banker is quite real."

Meanwhile, across the pond in the USA, key players in the shrimp trade expressed confidence that the trade in America would not only deal with potential public relations problems in a rational way, but would make the most of falling prices to stimulate greater consumer demand.

"We know what the issues are. What we have to do is get out there and communicate the great value of shrimp to restaurants and retailers," said John Filose, vice president of sales and marketing for Ocean Garden Products. "Whatever the size is, shrimp prices are now 20% to 30% below historical levels."

He continued: "There may well be a mountain of shrimp this summer, but summer is still a long way off. The situation in the EU could change. In three or four months that mountain could be a bunny hill. We've got to go out and sell and stop whining."

"We are now seeing shrimp prices that are at 100- and 120-month lows. You can't produce 16/20 tigers for the prices being paid," said Ocean to Ocean Seafood's Dave Light.

"Prices will go even lower, because Japan is not coming back as a major buyer any time soon," commented Jim Bugbee, sales manager of Seattle, Washington-based Talon International. "We all have to do more to push sales throughout the system."

He expressed concern, however, that if prices paid to producers drop too much there will be no incentive for them to export. "I've heard that the floor price is $3.40 a pound for 60/70s from China, or $2.50 a pound for 41/50 headless," he said. "If they fall below those levels, production will be diverted to the domestic market."

Andrew Kaelin of Agribusiness International Services, a consultant to the World Bank, confirmed that $2.50 per pound for 41/50s is the break-even point for producers in southern China.

RELATED ARTICLE: East China seafood protests EU prohibition on Asian shrimp.

The East may have once been red, but East China Seafood Import/Export Corp. is a lot redder for another reason these days. The Beijing company is mad about a European Union ban on imports of Chinese shrimp and other products said to have traces of the antibiotic chloramphenicol.

The EU is being hypocritical, the company charged in an open letter to customers, because it bans the drug entirely from imports as a "death risk," yet allows 10 parts per billion in exports. The USA is consistent, at least, setting a limit of five parts per billion for both imports and exports.

Furthermore, East China Seafood complained, the ban is being enforced unfairly as a nontariff barrier against Chinese shrimp. In a container impounded at Vigo, Spain, it charged, nine out of ten samples didn't show the slightest trace of chloramphenicol, while the tenth showed a trace "less than the quantitative level." The shipment was destroyed, costing the company $100,000.

"Do not let the bureaucrats override your hard work!" the company urged its customers. "Fight with us and write to your Ministry of Health and Consumer Affairs. Write to EU Commissioner David Byrne and demand internationally recognized levels of residues, toxins, bacteria, etc."

RELATED ARTICLE: Asian shrimp scandal keeps spreading, European union gets tough on checks.

First it was China. Now antibiotic residues have turned up in shrimp from Vietnam, Malaysia, Thailand and Myanmar (Burma) as well -- and the European Union is stepping up testing of imports from those countries.

People are getting nervous about the situation. In the United Kingdom, the Tesco supermarket chain pulled shrimp suspected of being tainted off its shelves, and even took out an ad in the Daily Mail warning consumers not to eat shrimp already sold.

On March 19, the EU's Standing Committee for the Food Chain and Animal Health approved a European Commission proposal to increase testing for antibiotic residues in imports of shrimp from Vietnam and Myanmar and in both shrimp and poultry imported from Thailand.

Action came after random checks by EU member sates on imported fish and poultry found nitrofuran residues in shrimp imported from Vietnam and shrimp and poultry from Thailand. Checks on shrimp imported from Myanmar revealed chloramphenicol residues, the same as in Chinese shrimp and other products.

Nitrofurans are veterinary drugs no longer used on food-producing animals in the EU because of health concerns, including a possible increased risk of cancer in humans through long term consumption. Chloramphenicol is a potent, broad-spectrum antibiotic drug, which has been banned for use in food-producing animals in the EU since 1994. It is used in human medicine only in serious cases.

China, which was hit by the EU with an import ban after chloramphenicol was found in shrimp and other products, can forget about getting off the hook any time soon. Patrick Deboyser, a senior official for health and consumer protection at the EU's office in Tokyo, said March 12 that the EU can't trust the Chinese food safety system now because nobody there could explain how the drug got into food products and nobody would take any responsibility for the problem.

Although China and Chinese exporters have attacked the ban as hypocritical, saying that Europe allows higher drug levels in its exports than in its imports, Deboyser stood fast. "It'll be several months before we can say that the Chinese system for food safety is one we can trust," Deboyser said -- and that will be only if China adopts stricter legislation on food safety, sets up laboratories that can detect banned substances, and punishes any industries or companies that violate the new standards.

RELATED ARTICLE: Japan's seafood exports boom but don't bring yen windfall

Japan prides itself on being a fish-eating nation, which everyone assumes means a fish-importing nation. But imports have flagged during the recession and exports are soaring. Prices have nosedived, however.

At 281,000 tons for 2001, fish and seafood exports were 44.1% ahead of 2000's. But at [yen] 93 billion, they brought hi only eight percent more. Saury exports nearly quadrupled at 24,000 tons, with Korea being the largest market at 8,275. Chmn salmon exports reached 28,000 tons and squid exports 43,000, with China taking 79% of the former and 74% of the latter.

RELATED ARTICLE: Shrimp farmers in the US form industry association.

Prawn and shrimp farmers in the United States now have their own association to promote the rapidly growing industry. Formation of the US Prawn and Shrimp Farmers Association was announced Jan. 30.

Shrimp farmers in Arkansas, Alabama, Georgia and Tennessee are represented thus far. "The formation of this association is a major milestone in the development of a broader based freshwater shrimp and prawn farming industry," said Clay Gutierrzz, vice president of Global Seafood Technologies and one of the founders.

The group plans to share technical information on production methods and hopes to get more farmers to grow freshwater shrimp. The US now imports most of its shrimp, but aquaculture accounts for at least 40% of world production of the highly demanded shellfish. About 10% of fainted shrimp is grown in the Western Hemisphere, but that is mostly in Central and South America.

RELATED ARTICLE: Fish Resources 2002 Expo set for Moscow this June.

Some 200 domestic and foreign fishing companies, organizations and research groups will gather in Moscow June 26-30 for the Fish Resources 2002 Expo at the All-Russian Exhibition Center.

The trade show was organized by the State Fisheries Committee (Goskomrybolovstvo) and the Moscow City Administration. The two agencies are also working toward setting up a specialized seafood market in the city.

Goskomrybolovstvo has been attempting to improve quality control in the Russian fish and seafood industry to ensure that its products meet international standards. After a long decline, moreover, domestic production seems to be on the rebound -- pollock and cod catches, for example, are running ahead of last year's output.

For more information, contact the organizers by phone at 7-95-181-09-18 or fax at 7-95-181-09-73, or e-mail at nfr-vo@aha.ru.
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Comment:European ban on Asian shrimp imports puts even more pressure on prices: prices for farm-raised shrimp could fall through floor, as supplies are expected to build with no place to go except the USA market. Look for big summer promotions to "move mountains." (QFFI's Global Seafood Magazine).(Statistical Data Included)
Author:Saulnier, John M.
Publication:Quick Frozen Foods International
Article Type:Statistical Data Included
Geographic Code:1USA
Date:Apr 1, 2002
Words:2516
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