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Megatrends equal mega shrimp trends: aquaculture and globalization imperative.

Megatrends Equal Mega Shrimp Trends: Aquaculture and Globalization Imperative

Shrimp farming "may lead us to a day when shrimp will be an extremely affordable, highly nutritious meat that will be eaten every day -- truly a |Chicken of the Sea' -- or even better!"

Furthermore, Brad Margus, president of Deerfield Beach, Florida-based Kitchens of the Oceans, told the International Seafood Conference, the market for shrimp will be fully internationalized: "Globalization is no longer an objective, but an imperative."

Shrimp is being raised now in at least 40 countries -- China alone produces over $1 billion worth a year -- and cultured shrimp already accounts for 26-30% of the shrimp on world markets. "Many experts tell us that in five more years, farm raised shrimp may account for 50% of the world's production," Margus said.

"Yet there is still a long road ahead," he warned. Hatchery technology remains rudimentary, and pond management techniques to reduce grow-out time and increase yields are still being tested. "A scientist researching shrimp-farming is still embarrassed to talk to a chicken scientist, because of the magnitude of what he has not yet learned about shrimp."

As farmed output (1.4 billion pounds in 1990) expands rapidly, Margus warned, "Markets are likely to be frequently thrown out of balance. There will be a period of price volatility leading to lower prices. It will be quite some time until a new order is established and the system gets back into balance. But one thing is certain: prices will stabilize at lower levels."

They'll be world levels, of course, for there'll be a world market. It's already happening. "Almost everyone now has a facsimile machine and instant communications with most of the world," he said. "An artisanal shrimp fisherman, sitting in his canoe in southern India, now knows the C&F Los Angeles price being paid for small Indian PD shrimp. Meanwhile, a supermarket buyer in Michigan learns the Canton Trade Fair prices quoted only hours earlier for Chinese white shrimp."

Shrimp has a great future in the United States, Margus said. While overall seafood consumption has increased only marginally, the consumption of shrimp shot up 71% from 1981 to 1988 (that probably means 90% for the decade, if the growth rate kept up for the last couple of years). A limping domestic industry can supply only 30% of the demand, he added: "As the sun sets on the domestic shrimp fishery, the U.S. buys larger and larger quantities of shrimp from around the world."

Foreign suppliers are lining up by the thousands to tap the U.S. market, Margus said, but few of them realize what it takes to make it: as in the Fats Waller song, "Find out what they like, and how they like it, and give it to 'em just that way."

They also don't seem to know that U.S. marketers have to maintain inventories around the country, subjecting them to market and credit risks; somehow find buyers for every kind of shrimp there is, however little need there is for it; and take back any shrimp rejected by customers for real or imagined causes.

Although the shrimp industry is tough, it is also still very fragmented, he said: "No large, dominant company is capable of influencing the industry. With few barriers to entry, and tremendous foreign competition, I do not see the industry consolidating soon." But with the competition getting tougher, there could be outbreaks of "irrational" retaliation -- meaning more price wars. One result: American shrimp processors will modernize their facilities to cut costs. Another result: more importers will source value-added items overseas, leaving more excess capacity and leading to still more price wars in the U.S.

For Kitchens of the Ocean, the thing is to establish strong partnerships with overseas suppliers. "For example, we have found tremendous advantages in working directly with shrimp farmers whom we direct to grow shrimp to sizes which not only maximize the farmer's profit, but fit in with our long-term marketing needs. This is something we never had before."

Now that's globalization!

PHOTO : "The fragmented shrimp industry insures that no large company is capable of controlling the business," says Brad Margus, president of Kitchens of the Oceans.
COPYRIGHT 1992 E.W. Williams Publications, Inc.
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Publication:Quick Frozen Foods International
Date:Jan 1, 1992
Previous Article:Crash, crash, crash go shrimp prices as exports to Japanese market stall.
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