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Product explosion and market reaction to Asia's black tigers and China whites.

Product Explosion and Market Reaction To Asia's Black Tigers and China Whites

Last year farmed shrimp production worldwide reached 650,000 metric tons, accounting for around 26% of total supplies. China is by far the main cultured shrimp producing country, with output expanding impressively from 2,000 MT in 1980 to a peak of 200,000 MT eight years later.

The People's Republic is also an important exporter of farm-raised shrimp, taking a lead position in the USA and Japanese markets in 1988. Its cultured whites have found their way to the European sector, but total shipments are still far below exports to North America and Japan. In Europe the Chinese shrimp is used mainly in ethnic restaurants, while in leading buying countries it is accepted in other restaurants as well as in retail stores. While exports absorb about 50% of the Chinese cultured shrimp harvest, it is interesting to note that the other half is consumed within the PRC.

Indonesia and Thailand are the second and third major cultured shrimp producers, each charting impressive black tiger growth rates last year. Indonesia doubled its output in five years to reach 100,000 MT by 1989. Thai expansion was even more impressive as last year's figure was five times the 1985 level.

Ecuador is the only Latin American country among the top shrimp farming nations. Its output varies substantially with post-larvae availability, which depends on ocean water temperature. El Nino years are generally ones of high productivity, as the warmer temperatures increase the volume of post-larvae for the shrimp farms. The main species cultured in Ecuador -- and in other Latin American countries -- is white shrimp (Penaeus vannamei).

Recent developments in Mexico, where permission is now being granted to run shrimp farms, should lead to an increase in the Penaeus vannamei supply. However, 1988 yields were reported at only 3,500 MT.

Cultured shrimp supplies available in industrial volumes consist of just a few species -- notably whites and black tigers. China concentrates on whites, while all other Asian developing countries are raising tigers, which now account for some 40% of total shrimp aquaculture production. This share is expected to increase in the next few years due to heavy investments made in Thailand, Indonesia and the Philippines.

Among the first 10 shrimp culturing countries, eight are developing nations from Asia. This region alone accounts for more than 80% of world shrimp culture production, and the most impressive growth rates during recent years have taken place there. Due to geographical location, these countries were mainly looking to Japan as an outlet for their harvests. In fact, before 1989 Japan received most of the cultured shrimp output from Asia, resulting in a substantial rise in imports and subsequently in cold storage holdings.

Japanese purchases of shrimp swelled from 200,000 MT in the mid-80s to 260,000 last year. Nations such as Indonesia, Thailand and China replaced India as the traditional top supplier to Tokyo buyers.

About 44% of the Japanese shrimp imports is presently coming from aquaculture ventures, which compares to 10% in 1985. Despite the heavy arrivals of cultured shrimp in 1987 and '88, prices did not weaken. The reason behind it could be traced to massive purchases by traders speculating on currency exchange fluctuations. As a result most of the additional supply coming from shrimp farms ended up in coldstores.

In May of 1989 the market suddently collapsed when the dollar began to stabilize against the yen and Japanese importers began exercising a more cautious buying strategy. At the same time, voluminous stocks of black tigers from ponds in Indonesia, Thailand the Philippines drove down prices for some species and counts by 40-50%. Hence imports during the second half of 1989 declined noticeably.

Japanese wholesalers passed on some of the price cuts to the retail market, and demand for shrimp improved at the end of last year following a rather bleak period. An upturn in sales finally managed to reduce cold storage holdings after six years of continuous expansion. By March of 1990 the shrimp market seemed to be at a turning point again, with prices firming up though still remaining below their 1988 peak levels. But observers are not very confident that the improved conditions of late-1989 will continue if prices get too high.

With Japanese buying being weak overall last year, Asian shrimp farmers turned to their main alternative market -- the USA. It enjoyed good shrimp sales in 1989, especially during the summer months. China led all comers, but black tiger producers managed to boost sales as well. And for the first time in history, Asian shrimp accounted for more than half of USA imports compared to a 44% share for Latin American suppliers. The ratio was reverse in 1988, and historically before 1985 Latins dominated the North American market with a 70-80% share of the market.

Jochen Hannes Nierentz is a fishery industry officer (international trade) with Globefish, the Rome-based Fishery Industries Division of the United Nations Food and Agriculture Organization (FAO). His text is digested from remarks recently made to the Seafood '90 Japan Conference in Kyoto.
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Title Annotation:includes related article on shrimp culture conference in Kuala Lumpur
Author:Nierentz, Jochen Hannes
Publication:Quick Frozen Foods International
Date:Apr 1, 1990
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