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Ever Shifting Exchange Rate Currents Set Pattern for World Shrimp Market.

Rising yen spurs rebound in Japanese imports, while rising dollar does same for United States. Healthy demand in Europe reverses 1998 price slide. Cyclone in India and white spot outbreak in Ecuador are latest natural disasters to affect the shrimp industry.

Shrimp production has its ups and downs, and 1999 was no exception. But the ups and downs of major currencies had as much to do with shifts in the world market as the shrimp themselves.

The much-heralded euro, which replaced national currencies in much of the European Union, fell 17% against the US dollar. The Japanese yen, meanwhile, rose 14.9% against the dollar as the Land of the Rising Sun shows signs of rising from its long recession.

In Europe, the market was strong, thanks to rising demand and diminishing supply. Peeled undeveined shrimp were particularly scarce late in the year because of low catches in India. Japan stepped up imports of black tigers, making those, too, harder to get for European importers (see story, Strong Fourth Quarter Shrimp Sales Ring in Happy New Year for Trade).

Demand remained strong in the United States as well, with the stronger dollar making imports more attractive than ever. Domestic wild catch has about reached its limit, so Latin America as well as Asia can cash in as long as they have the shrimp to sell. But with Europe and Japan both buying, they have greater options.

As of Nov. 29, frozen shrimp prices on the Tokyo wholesale market were [yen] 2,400-2,700 per kilo for 2630 count Indonesian headless whites, [yen] 2,200-2,400 for 26-30 Malaysian headless whites, [yen] 2,400-2,500 for 26-30 Indonesian black tigers, [yen] 2,350-2,550 for 26-30 Indian black tigers, [yen] 2,150 for 30-count head-on black tigers from both Thailand and the Philippines, and [yen] 4,500-4,600 for 26-30 headless Indonesian banana shrimp.

Prices per pound for headless shrimp in the USA Dec. 28 (all 26-30 count) included $6.10-6.50 for Gulf whites, $6.10-6.40 for Gulf browns, $5.45-5.85 for Thai black tigers, $5.25-5.60 for Indonesian black tigers, $5.55-5.70 for Indian black tigers, $5.15-5.60 for Bangladesh black tigers, $6.65-6.80 for Mexican first grade whites, $6.45-6.70 for Mexican first grade browns, $6,50-7.00 for Ecuador whites, $5.25-5.30 for Panama pinks and $6 for Panama whites. Gulf peeled were going at $4.35-4.65 for 61-70 count, and cooked tigers at $7.60-7.85 for 26-30 count. Most prices were unchanged or up a cent or two from November.

The Usual Crises

There were the usual crises, from a cyclone that devastated shrimp farms in India to an outbreak of white spot disease in Ecuador. And there were the usual environmental concerns, from water purity on farms to sea turtles caught by trawlers.

Thailand's Ministry of Fisheries announced plans to test a new system to purify sea water without chemicals. Friends of turtles were marching again, after the World Trade Organization (WTO) scotched US efforts to impose turtle excluder devices (TEDs) on foreign fishermen.

Chemical-free water management will make shrimp farming more lucrative as well as more environmentally-sound. "Lower-cost irrigation management coupled with environmentally friendly farming will help shrimp exporters become more competitive on world markets," observed Dhammarong Prakobboon, director of fisheries.

Investors from Japan, Denmark, Canada and Australia are interested in developing more farms on a build-operate-transfer basis. The Canadian government has agreed to share the five million baht expense with the Thai Department of Fisheries to fund the initial phase of the study, set for the Laem Sing district of Chanthaburi province.

After the US Department of Commerce imposed a ban on import of shrimp caught without TEDs, affected countries appealed to the WTO, which overruled the ban as a non-tariff trade barrier. Environmentalist demonstrators turned up at last month's WTO meeting in Seattle to protest the decision; more violent elements trashed the city.

Even if it can't bring overseas fishermen around, the US government can crack down on its own. That's what happened in Florida after an unexpectedly high number of dead leatherback turtles turned up on the Atlantic Coast. TED's were already mandated, but the government required that the openings be expanded from 35 to 71 inches.

An activist group in the USA called the Marine Turtle Research Project announced Dec. 22 that it would try to drum up a boycott of Mexican shrimp, complaining that there is a high turtle mortality rate in waters trolled by the Mexican fleet off Costa Rica and Panama as well as Mexico itself (Mexican catches were reportedly so good last fall they overloaded coldstores.).

Ecuador's white spot outbreak decimated shrimp farming in El Oro province south of Guayaquil last summer, threatening to bankrupt 800 farmers. Value of production in June fell to a mere $3 million, compared to the normal $22 million, and production for the year was forecast at $70 million, compared to $200 million in 1998.

About 30% of the farms harvested shrimp early to avoid further losses, and 40% left their ponds dry and empty rather than reseed them. Results of efforts to control the disease have not been encouraging, and last fall the president of the Provincial Aquaculture Association advised producers to import shrimp from Peru, Colombia and Central America to process and resell.

White spot has also hit Peruvian shrimp farms recently, and had hit Central America and parts of Mexico before it reached Ecuador. At the fifth Ecuadorian Aquaculture Conference Oct. 28-30, there was some talk among 60 specialists from several Latin American countries of developing "super shrimp" resistant to the virus. But most agreed that better management is the wiser course.

Japan Makes Comeback

For most of 1999, all eyes were on Japan, where a continuing recession threatened demand for shrimp. Sales were "extremely poor" at the beginning of the year, Bill Court reported for the Tokyo-based Fish Information Service.

Frozen shrimp imports for 1998 had been down for the fourth year in a row, at 238,906 tons as opposed to 267,247 in 1997, 288,763 in 1996, 292,910 in 1995 and 302,975 in 1994. Because shrimp are relatively expensive, they bore the brunt of the recession.

Imports for March 1999 were still off 10%. By spring, the market was improving, with strong sales during the April 29-May 5 Golden Week holiday. Yet the pattern remained erratic; as late as the Obon (Festival of the Dead) holidays Aug. 13-17, shrimp sales were poor.

But Japan may have turned the corner shortly thereafter. As of the end of October, with the economy improving, Japanese shrimp imports stood at 197,852 tons, compared to 196,598 a year earlier. Valuation was [yen] 222.6 billion, versus [yen] 285 billion at the end of October 1998.

Japanese cold storage holdings as of Sept. 30 included 70,583 tons of shrimp, off from 75,361 a year earlier, indicating that the logjam was beginning to break. Overall frozen fish and seafood holdings totaled 1.2 million tons at the same point in 1999, compared to 1.1 million in 1998.

The decline in import valuation was in fact considerably less than it appeared, because the exchange rate for the yen was 121 to the dollar in November 1998 and 103 per greenback a year later. In dollar terms, imports fell only 8.1% from $2.35 billion to $2.16 billion, although they were off 21.8% in yen terms.

That wasn't coincidence, reported William Chauvin, president of Shrimp World, Inc., at the beginning of November. "Generally, we can expect that as the yen continues to increase, so will the volume imported into Japan," Chauvin observed. "Additionally, if the economy and demand in Japan continue to improve, we can expect to see even more shrimp imports."

Despite India's weather troubles, that country's exports to Japan through October actually increased from 41,647 to 43,235 tons -- thus surpassing those for Indonesia, which had been in first place with 44,390 tons in 1998 but saw its shipments fall to 40,977 last year. Other major suppliers were Vietnam at 22,760 (off slightly from 22,812), Thailand at 14,604 (up from 13,773) and China at 10,860 (up from 9,697).

US Imports Still Rising

US shrimp imports through October 1999 totaled 269,125 tons, up 6.7% from 252,121 tons for the same ten months of 1998 (Imports for all of 1998 were 315,442). Shrimp consumption in the USA has been growing by leaps and bounds.

Domestic Gulf Coast landings were available only through July 31 at press time; at 78,439, they were running 7.9% ahead of the 1998 pace of 72,707. But over the past five years, Gulf Coast landings have trended downwards -- and increasingly US demand has been met by heavy imports. Louisiana accounts for most of the landings -- 40,853 tons through July 31, 1999, up from 36,140 a year earlier.

On the West Coast, Oregon shrimpers had landed 20.5 million pounds by the end of the season Oct. 31, more than three times the 6.1 million recorded the previous year. Catches were 3.4 million pounds each in Washington and California, compared to 2.7 million and 1.3 million in 1998. But West Coast landings are only a fraction of Gulf landings -- and a drop in the bucket against growing domestic demand.

Sourcing for US imports has shifted dramatically in the past year. Thailand accounted for 87,699 tons last year, up 26.8% from 69,144 the year before. But tonnage from Ecuador, perhaps because of white spot problems, fell 15% from 56,153 to 47,738. Mexican imports slipped from 23,917 to 21,933 tons, but Indian shipments were up from 17,352 to 19,024 and Indonesian from 12,556 to 13,603. And imports from Venezuela more than doubled, from 4,967 to 10,862 tons.

Cold storage holdings as of Oct. 31 totaled 57.4 million pounds, with peeled accounting for more than half of that -- 24.3 million. Holdings totaled 7.3 million pounds for raw headless and seven million for breaded; the remaining 10.8 million were "unclassified." Ecuador is the primary source of shell-on shrimp, whereas Thailand is the number one supplier of peeled.

Notes on Exporters

Overall exports of Indian frozen shrimp were up a bare 1.2% to 102,484 tons over 1998-99, versus 101,318 for 1997-98, according to the Marine Products Export Development Authority (MPEDA). Volume was still short of the 105,482 tons recorded for 1996-97, however.

A cyclone that struck Orissa and neighboring states was expected to reduce production for calendar 1999 by 10% from a projected 100,000 tons at the beginning of the year, MPEDA reported last month. Worse, the cyclone destroyed much of the seed stock at hatcheries, which will cut production this year.

Prawn farming is on the upsurge in Queensland, Australia, with farmed prawns having accounted for 25% of those produced last year. Farming also assures a more consistent quality supply 12 months a year, according to Ross Lobegeiger, supervising extension officer for the state's Department of Primary Industries-Fisheries.

Halfway across the world, coldwater shrimp landings in Norway through October were up 68% to 59,600 tons, compared to 41,700 in 1998. But catches in Iceland fell by half, from about 14,000-15,000 tons to only 5,000-6,000. Canadian catch was running 30-40% below initial projections, in part because fishermen switched to more lucrative crab, but still amounted to about 61,000 tons processed at in-shore plants and 50,000 frozen at sea for export to Europe and Japan.

Japanese Frozen Shrimp Imports October 1999

ORIGIN M.T. Value M.T. Value

South Korea 70 62 171 224
China 1,345 1,017 10,860 7,120
Hong Kong -- -- 24 47
Vietnam 2,874 2,735 22,760 20,526
Thailand 2,262 3,017 14,604 21,249
Singapore 9 4 20 8
Malaysia 299 360 2,506 2,959
Philippines 857 1,097 5,989 7,648
Indonesia 4,756 6,074 40,977 52,329
Myanmar 440 438 3,497 4,064
India 4,559 4,798 43,235 45,632
Pakistan 137 183 663 902
Sri Lanka 162 222 1,202 1,665
Bangladesh 681 633 4,149 3,810
Macao 10 24 98 220
Iran -- -- 246 268
Kuwait -- -- 240 442
Iceland 225 300 2,067 2,528
Norway 61 29 959 889
Denmark 88 36 1,079 1,081
Russia 384 426 4,597 4,623
Greenland 950 821 8,604 7,525
Canada 612 476 9,137 8,140
USA 19 14 347 304
Mexico 49 90 476 973
Colombia 50 65 583 878
Suriname 79 151 1,154 2,163
Ecuador 352 443 4,758 6,545
Brazil 81 133 1,218 1,921
Argentina 159 195 1,786 1,900
Mozambique 213 226 1,439 1,637
Madagascar 169 147 1,770 1,944
Australia 900 1,578 3,998 6,584
Papua New Guinea 79 85 641 749
New Zealand 24 43 547 965

TOTAL 23,056 26,090 197,852 222,589

M.T. = Metric tons;

Value = million yen;

- = no imports;

0 = less than one.

Source: NMFS, Long Beach, Calif., USA.

USA Imports of Shrimp (all types) by Country With Comparisons, 1999 October

Metric Tons

OF ORIGIN 1998 1999 1998 1999 1998

Thailand 11372 13573 69144 87699 92265
Ecuador 4219 1803 56153 47738 64548
Mexico 6050 7982 23917 21933 35435
India 1366 1730 17352 19024 20151
Indonesia 1268 1570 12556 13603 15285
Panama 913 474 8620 6847 10190
Honduras 1106 1458 7053 5839 8614
Canada 604 579 7066 5806 7877
China 601 1497 5591 7188 6996
Peru 750 132 6274 1918 6947
Bangladesh 517 457 5479 7485 6318
Venezuela 217 1290 4967 10862 5722
Guyana 326 615 5073 4965 5631
Viet Nam 507 870 3743 6556 5029
El Salvador 396 139 2943 2360 4009
Nicaragua 432 482 2902 3332 3798
Guatemala 234 152 1568 1512 2369
Colombia 152 203 1807 2461 2129
Philippines 181 107 1432 1325 1776
Pakistan 622 250 1029 1073 1445
Belize 240 373 1019 1460 1386
Suriname 37 70 734 1099 879
Costa Rica 61 95 654 812 831
Brazil 39 106 803 1705 822
Malaysia 49 62 714 647 731
Sri Lanka 79 48 544 733 654
Greenland 20 0 454 206 491
Chile 34 30 348 401 444
Norway 20 22 314 55 377
Iceland 29 9 354 73 358
Taiwan 35 71 303 368 357
Oman 32 49 198 264 295
Singapore 16 15 193 199 265
Japan 31 5 89 100 190
Burma 0 42 117 297 117
UAE 0 68 78 270 94
Russia 0 0 70 0 88
Macao 16 7 85 126 85
Bahrain 0 16 49 111 49
Hong Kong 0 1 41 83 49
Nigeria 0 0 44 16 44
South Korea 0 5 23 41 43
Denmark 0 11 33 36 40
United Kingdom 17 16 36 61 36
Germany 0 0 17 18 33
Argentina 0 0 26 46 31
New Zealand 0 18 25 33 25
Bulgaria 0 0 17 0 17
Netherlands 0 0 16 1 16
Combined Countries 10 84 58 341 62

TOTAL 32,601 36,586 252,121 269,125 315,442

RELATED ARTICLE: Out of the Ashes, a New Dawnfresh ...

These Dawn-fresh workers are happy because they're back at work producing scampi at the second temporary plant established by Dawnfresh Seafoods following a fire that gutted the company's 10 million [pounds sterling] plant at Bothwell, Lanarkshire, Scotland, last July. Dawnfresh has taken advantage of the disaster by installing new equipment and adopting new processing methods to enhance quality. The interim facility, situated at the Motherwell Food Park, is producing cooked and chilled scampi, including the Finest range for Tesco supermarkets, while plans move ahead to rebuild on the old site. It took four months to restore production to pre-fire levels with two temporary processing facilities.

RELATED ARTICLE: Ocean Garden Quits NFI over Assessment; Vidali Returns to Take Helm at Company

Count Ocean Garden Products (OGP) out of the National Fisheries Institute (NFI). The company, based in San Diego, California, USA, but owned by Mexico's Bancomext, quit the US-based industry group Jan. 5 to protest a campaign by NFI for approval of mandatory assessments for a generic program to protect and promote the fish and seafood industry.

OGP's action came several months after Carlos Vidali returned to assume the helm as president of the company, although OGP has opposed mandatory assessments for some time. Vidali had served as executive vice president and chief operating officer from 1989 to 1996, but left afterwards to become president of Gerber California, an international trading company.

It was in 1998, while Vidali was away, that the Mexican government spun off OGP to Bancomext, the country's import-export development bank. OGP has since rung up record sales and income, and its 1999-2000 shrimp season is off to a strong start. Alfonso Salazar, OGP's outgoing president, has been named executive director of business promotions for Bancomext.

In opposing NFI's proposal for a 0.25% product value assessment on US first-receivers and importers to support a Mandatory Resource Enhancement and Access Program under guidelines set by the US Department of Agriculture, Jon Filose, OGP's vice president of sales and marketing, noted that his company already offers technical and financial support to producers. Filose observed that the poultry industry is doing fine without a generic campaign or mandatory assessments. Other objections to the NFI plan:

* A well-established system under state governments (within the three-mile limit) and the federal government (through regional fisheries management councils) is already in place to protect and enhance seafood resources, and other sovereign nations have programs of their own.

* The fish and seafood industry simply isn't generic. The beef industry has to deal with one basic product, but there are all sorts of products in the fish and seafood market and many kinds of processors, first-receivers and importers involved.

* A quarter of a percent assessment may not sound like much, but applied to high-value products like shrimp and lobster it can really add up, and make for much more expensive seafood at the restaurant and retail levels -- where consumers think prices are already too high.

* Taxing all first-receivers and importers and pooling the millions of dollars raised would be an incredibly inefficient way of spending money. Plus, the 12-member board appointed by the USDA to nm the program would simply be another level of bureaucracy.

Filose, himself a former NFI president,, has for many years been in the forefront of vocal opposition to what amounts to taxation of the first handlers of fishery products. For another viewpoint on the controversial issue, read QFFI's interview with NFI Chairman Joel Kolen, beginning on page 46.
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Article Details
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Comment:Ever Shifting Exchange Rate Currents Set Pattern for World Shrimp Market.
Author:PIERCE, J.J.
Publication:Quick Frozen Foods International
Article Type:Statistical Data Included
Geographic Code:00WOR
Date:Jan 1, 2000
Previous Article:Aerofreeze Begins US Sales For Spiral, Tunnel Freezers.
Next Article:Strong Fourth Quarter Shrimp Sales Ring in Happy New Year for Trade.

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