Impact of Oversupply of Shrimp on the Chinese Shrimp Industry: 01-27-2020

China is the largest consumer and importer of shrimp in the world along with the US. The shrimp market in China is expected to exceed 2million tons by 2023, exhibiting a CAGR of 2%. The demand of this particular seafood has escalated in the country because of high growth in the Chinese-middle class population with economic development. In 2019, the country became the largest importer of shrimp by importing 800,000 metric tons, overtaking the USA. However, such large imports specifically from India and Ecuador, and strong domestic harvest the shrimp prices in the country went weak even during the Spring Festivities.

The two-week-long festival, which starts with the Chinese New Year on Jan 26, sparks frenzy in seafood trade and the imports of seafood specifically shrimp typically doubles. However, a Shanghai-based importer, whose firm expects to import 150 containers of shrimp this year, said that the current market prices are “ in the bottom of the valley” and his company is struggling to shift the product. In January 2019, China imported as much as 100,000 metric tons of shrimps; 74,000 were imported directly and almost 30,000 ton of undocumented shrimp was imported from Vietnam.

According to shrimp importer who orders at high prices in the run-up to this year’s Chinese New Year is losing money on each sale and this situation is not expected to improve any time sooner. The importer are pointing finger at the high supply from South America, and Ecuador, which have oversupplied the market than the demand.

Impact of oversupply of imported shrimps on the local Chinese market:

Low prices of imported frozen shrimps appear to be impacting the market for live Chinese farmed shrimps, with prices also down on year-on-year. According to a Chinese aquaculture industry publication, shrimp farmers in Jiangmen county, Guangdong province, were considering, “ throwing their shrimps into the river”, because of a lack of buyers. Local shrimp farmers were looking forward to getting good prices for Chinese New year, especially with African Swine Fever causing pork price volatility, but the market has been disappointing for them.

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