US shrimp prices could be flat to lower this year amid expected global production growth and continued lackluster demand in the US.
Even though retail demand could pick up if grocers promote the crustaceans, other factors keeping US buying lackluster coupled with the rebound in global production could keep prices from rising.
Global production is improving as countries recover whose shrimp harvests had been hard-hit by early mortality syndrome and as Ecuador boosts its output, Southern Fisheries president Domingo Moreira said in a Feb. 23 post on business social networking website LinkedIn.
“Demand in the US remains sluggish, though,” he said. “The macro economic landscape is dragging and I anticipate flat to softening prices in the US for 2015.”
Shrimp buyers can buy hand to mouth and don't need to secure longer term contracts, said Moriera and another US seafood sector source.
Decent global production is outpacing restaurants returning shrimp to their menus in quantities like they had prior to sky high prices, Harry Mahleres, director of purchasing for Seattle Fish Company, told Undercurrent.
“Its like turning the Titanic,” he said of the slow return of shrimp to menus as prices come down.
While smaller size shrimp prices may drop, larger sizes will remain more stable as harvesting before full grow-out in Mexico, India, Indonesia and Thailand keeps the market tighter for larger sizes, Mahleres said.
However, another industry source told Undercurrent he doesn’t see much demand growth potential from the food service sector as many restaurants didn’t remove shrimp from their menus, even when prices were higher.
His company has been doing lighter buying as it has felt the pinch of imported shrimp being worth less amid lackluster demand in the US, he said.
With India’s harvest coming up, as well as the stronger US dollar, there is room for price to come down further, this source said.
US wholesale prices for 21-25 count easy-peel headless, shell on vannamei from Indonesia have fallen to $5 a pound in week 9 of this year from a 2014 high of $7.35, according to the Undercurrent price portal. Similar drops have been seen in shrimp coming from Thailand and India.
“I don’t see prices moving up this year,” another industry source said. “I think things will stay sluggish.”
Inclement winter weather that has been keeping people home in certain parts of the US has been contributing to lower seafood demand in the US, another industry source said.
As one example, in the first quarter of fiscal 2015, winter storms forced The Fresh Market to temporarily close a significant number of stores.
With plenty of carryover inventory from the holidays, a lack of new purchases from overseas suppliers has been contributing to lower prices, Todd Rushing, co founder of New Jersey-based Shrimp Trader, told Undercurrent.
But there are some holes opening up in inventory coffers, so some buying is coming back in, Rushing said.
However, buyers typically aren’t as aggressive in making purchases from overseas just before the yearly Seafood Expo North America trade show in Boston because they want to see what the packers are going to do, Rushing said.
The show this year is scheduled for March 15-18.
Prices are also under pressure as Chinese demand cools after the Asian nation’s New Year celebrations, Rushing said.
“The pendulum seems to be swinging more toward the buyer at this point,” Rushing said.