INTERVIEW: Global shrimp market faces significant shift in H1 amid oversupply, declining prices: Aquamarine MD

The global shrimp market has seen significant shifts, particularly in the first half of the year, as oversupply, declining prices, and ongoing supply chain disruptions have taken their toll, Bert Van Loock, owner and managing director of Belgium-based firm Aquamarine Seafood said in an interview.

"The whole of 2023 has been characterized by oversupply and consumer hesitance, which caused high stock levels," Bert told S&P Global Commodity Insights on Oct. 18.

Since the start of 2023, prices of Vannamei shrimp and Black tiger shrimp, especially, have been on a downward trend, he added.

he explained. "Due to the energy crisis following the Ukraine war, the whole of 2023 has been characterized by oversupply and consumer hesitance, which caused high stock levels."

"This glut of shrimp on the market resulted in price drops of sometimes up to 40%, leaving producers grappling with excess stock and weak demand."

However, Bert noted that the price drop has not significantly lowered the retail prices.

In the European shrimp market, much of the end product is distributed through retail supermarkets and the HoReCa sector.

"Supermarkets tend not to entirely reflect the drop in purchase costs," he said. "Even when wholesale prices drop from Eur13/kg to Eur10/kg, restaurants don’t adjust their menu prices." As a result, consumption patterns remained pretty stable, with consumers largely unaffected by the price fluctuations at the wholesale level. This dynamic has kept demand somewhat insulated and end-consumer demand remains fairly inelastic.

Shifting consumer preferences

Bert highlighted the shift in consumer preferences toward larger shrimp sizes.

As prices dropped, particularly for premium sizes such as 13/15 and 16/20, consumers began opting for these larger shrimp, which they could now purchase at prices similar to what they previously paid for smaller counts. "When traditionally expensive shrimp sizes become more affordable, consumers switch to larger sizes," he remarked.

Bert also highlighted the regional preferences within the European shrimp market. "In Belgium and the Netherlands, there’s still a clear preference for Black Tiger shrimp, especially for head-on shell-on products." This is despite the rising popularity of Vannamei shrimp in other regions due to its lower price.

He also noted that buyers in the Center and Northern part of Europe have historically sourced Vannamei shrimp from Asia, particularly India and Vietnam, because of their strong supply chains and competitive pricing for commodities like PD and PDTO shrimp. However, Ecuador has been increasing its market share in Europe by shifting to items like EzPeel and PD.

Global supply chain dynamics

Ecuador, traditionally an exporter of HOSO (Head-On Shell-On) and HLSO (Headless Shell-On) shrimp, has long relied on China, its largest importer, which primarily buys HOSO shrimp. However, with China’s domestic demand slowing and its market becoming more self-sufficient, Ecuador has been diversifying its offerings.

"Ecuador is opening up to Europe more into into IQF (Individually Quick Frozen) and what they call value-added items, which is EzPeel and PD," Bert noted, referring to peeled and deveined shrimp. Although these products aren’t considered premium value-added items for some, they represent a shift in Ecuador's approach to adapting to fluctuating global demand. This diversification helps Ecuador maintain its competitive edge in the European market, especially as Asian countries like Vietnam and India are grappling with supply shortages and higher demand in the US.

Meanwhile, Vietnam has been focusing on value-added products such as marinated and coated shrimp, moving away from its earlier reliance on commodity exports. Bert explained, "In Vietnam, they’re focusing more on value-added products like coated and marinated shrimp due to increasing demand." On the other hand, India has faced significant supply shortages, driven by overwhelming demand from the US, leading to delays and challenges in fulfilling new orders. This shift in dynamics is influencing how both Vietnam and India navigate their exports to Europe.

Future of shrimp prices

As the holiday season approaches, Bert predicts a short-term price increase driven by increased demand. “Prices will probably continue to go up in the short term, but I expect stabilization by February or March,” he said. He also pointed out that increasing demand from China for shrimp during its Lunar New Year festivities in 2025 could impact global prices.

Looking ahead, Bert expressed cautious optimism but highlighted the unpredictability of the market due to geopolitical risks.

“Geopolitically, we are not living in the most stable situation,” he said, which could disrupt the global shrimp supply chain. Despite these risks, he anticipates that shrimp prices will stabilize after the holiday season, barring any major global disruptions.