China shrimp buying slow with inventories high, farmgate prices low

Major retailers are securing orders for shrimp but Chinese buyers aren't joining them, according to Undercurrent News' sources in the country.

Farmed warmwater shrimp. Photo: Undercurrent News

Last week Siam Canadian Group’s CEO Jim Gulkin told Undercurrent the bottom of the shrimp market was “very, very close”, with orders by major retailers underway and more in coming weeks set to bring to a halt a recent crash in global prices. 

However, two importers based in China reckon Chinese buyers won’t be among those making big orders, at least in the short term. One said orders won’t pick up significantly until September.

“I think market demand is not changing so much at the moment,” a source, who wished to be quoted unnamed, told Undercurrent last week. “Last year inventories [in China] were too high and now the price has dropped, so players have stopped buying and are choosing to get rid of inventory,” he said.

“In the next few months, live shrimp in China will be coming to the market. So the earliest time [for big buys] should be September, I guess,” he said.

An executive at a large Chinese shrimp company spoke similarly. “I do not expect big importing by China in the short term,” said the source. “It will take time to get a big rise in consumption."

Recounting a recent visit by an executive from Ecuadorian shrimp company Songa to drum up business in China, the first source said the executive's trip had been fruitless.

“The boss of Songa came to China last month before the Brussels Expo [Seafood Expo Global]. From what I know, he did not get a lot of container orders,” he said.

Songa did not respond to Undercurrent’s request for comment.

China is one of the world’s largest importers of shrimp. Its surging imports of everything from Argentine red shrimp to Ecuadorian and Indian vannamei, have boosted global demand. Last year, the country imported 63,453 metric tons of shrimp, up 4% year-on-year, according to International Trade Center, as well as 46,774t of cold water shrimp (Pandalus spp., Crangon crangon), up 25% y-o-y.

Approximately another 300,000t was imported via Vietnam via the ‘grey trade’, according to Undercurrent estimates based on trade data with Vietnam. In January buying through this channel “completely stopped”, one Vietnamese exporter told Undercurrrent during the Brussels show, after a crackdown in the trade by Chinese authorities.

Domestic production

China will start harvesting shrimp in significant volumes soon. However, disease, which has dogged Chinese shrimp farms for several years, particularly in the south, appears again to be causing problems.

According to Shuichan, a Chinese industry publication, shrimp survival rates have been as low as 10% in “several areas”, it reported last week.

“This year, the success rate of early-stage shrimp production in several areas is less than 10%, and losses of farmers are serious. Recently, heavy rains occurred in many areas of the country, and weather was unstable, impacting vannamei shrimp cultivation,” it said.

A source at a Chinese processor sourcing farmed shrimp in Zhanjiang, Guangdong province in China, confirmed disease is “a problem”.

“Farmers still haven’t solved the problem of disease,” he told Undercurrent. In Qinzhou, Guangxi, local reporters said outbreaks of white feces and early mortality syndrome were behind a loss of 70-80% of first stockings in April.

According to Undercurrent’s prices dashboard, in week 19 average vannamei shrimp farmgate prices, 80pcs per kilogram, in Guangdong province, China’s largest shrimp-producing region, were CNY 58.6 per kilogram ($9.19/kg), down 25% compared with the same week last year. 

Farmgate prices for 60 count shrimp were CNY 64.6/kg, down 20% y-o-y. Prices for 120 count shrimp were CNY 45.3/kg, down 16% y-o-y. Although these prices are high by international standards, prices for live shrimp command a premium in China, while prices will likely continue to fall until late-August to September, when domestic supply reaches its seasonal peak.

The source with the Zhanjiang, Guangdong-based processor said China’s fishing moratorium should add some support to prices for farmed shrimp this summer. 

But the first Chinese importer source said among his friends there was "not so much optimism" about shrimp raw material prices looking ahead, he said