Indian shrimp farmers liquidating inventory ahead of new production, sources say

Indian shrimp farmers liquidating inventory ahead of new production, sources say

October 21, 2018 0 By Tariq Altararwa

Indian shrimp farmers liquidating inventory ahead of new production, sources say

Some Indian shrimp farmers are trying to get rid of product to free up space ahead of a new production cycle, according to sources.

The development comes as the market is in a wait-and-see mode ahead of the Seafood Expo North America show March 15-17 in Boston.

Packers on the Indian east coast, which is a major area of vannamei farming, are trying to get rid of their inventory to free up cash as well as cold storage for the new season, according to a note sent to Undercurrent News by Chaipat Kunapiwatkul, business development manager with Siam Canadian.

Kunapiwatkul, as well as a Tuesday report from ShrimpTrader, said larger sized shrimp prices are dropping while smaller sizes are stable on demand from China and India. ShrimpTrader added that all sizes are priced lower now than they were a year ago.

As of March 8, 30-count head-on-shell-on vannamei raw material prices were at INR 380 per kilogram ($6.08/kg on Thursday), down from INR 450/kg on Feb. 4, Kunapiwatkul said. On those dates, 70-count shrimp were priced at at INR 270, he said.

“With a new harvest arriving soon, sellers may be motivated to move out their higher priced inventories and covert it into cash,” the ShrimpTrader report said. “This is a delicate balancing act of minimizing losses in a dull market while maintaining enough sales volume to make room for new production.”

Almost all Indian packers depend on bank credit, and it appears they are under pressure from banks for some turnover, Kunapiwatkul said.

“At this point the selling price in (the) world market is not at all ideal for packer(s), but liquidation is crucial for them now,” Kunapiwatkul said.

In Vietnam, packers have resumed purchasing raw materials from farmers in India, the report said.

Meanwhile, there is a shortage of raw material in Thailand, where shrimp prices are trending higher, the report said. It remains to be seen whether Thailand will also need to import raw materials from India, the report said.

For the March 2-7 period, prices for head-on 60-count shrimp in Thailand were at THB 198/KG ($6.03/kg on Thursday), up from THB 180 at the beginning of December, Kunapiwatkul said.

Thailand sourcing raw material from Ecuador is also a possibility, the report said.

Ecuador has become a more-prominent player on the global shrimp market as production in Thailand and other locales has been hit by early-mortality syndrome.

A source at an Ecuadorian producer told Undercurrent last week that the market has been good after after the Chinese new year, with prices steady and Chinese demand seeming to be increasing.

Another source familiar with the Ecuadorian market told Undercurrent last week that 41/50 headless-shell-on (HLSO) shrimp were at $3.50 FOB Ecuador.

Last month, Undercurrent reported the HLSO FOB price for the US market for 41/50-count shrimp was at $3.30/lb, having been $3.60/lb on Jan. 21.

Globally, despite short supply of raw material and new offers that are trending higher, “some of the speculative longer-term contracts we are seeing are quite competitive, indicating to us where sellers see this market heading,” the ShrimpTrader report said.

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 a rebound in global production could keep prices from rising.

 

source.https://www.undercurrentnews.com/2015/03/12/indian-shrimp-farmers-liquidating-inventory-ahead-of-new-production-sources-say/