S&P Global — 25 October 2024
Daily Update: October 25, 2024
Global Shrimp is Big Business
By Nathan Hunt
Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy
In 2023, the world had too much shrimp. Oversupply of shrimp combined with consumer hesitance led to record high shrimp stock levels, dropping its price by as much as 40%. This year, the story has been completely different. Energy cuts in the shrimp-producing powerhouse economy of Ecuador have negatively affected supply and raised prices globally. While shrimp consumers didn’t benefit from the reduced prices of 2023, they are likely to be affected by the price increases this year, particularly in Europe.
Black Tiger shrimp and Vannamei shrimp are the big fish of the shrimp market. Black Tiger shrimp tend to be more expensive due to lower aquaculture production volume and a perceived superior taste profile. Vannamei shrimp are easier to produce and have a weaker shell. Different global markets have preferences for one or the other, with Belgium and the Netherlands preferring Black Tiger and many developing markets preferring the lower-priced Vannamei.
Ecuador is a massive producer of shrimp for the global market. This year, Ecuador's share of EU shrimp imports rose to 36%, up 4 percentage points from last year. India, Argentina, Vietnam and Venezuela also are significant suppliers. Ecuador has been suffering from the worst drought in 61 years, which has significantly affected shrimp production. However, the issue is not a shortage of water but a shortage of hydroelectric power limiting aquaculture capacity. Approximately 72% of Ecuador’s power comes from hydroelectricity, and the drought has forced energy rationing in the industrial sector.
"Unexpected power cuts in key sectors of the [shrimp] industry could generate economic losses of more than $5 million per day," the Ecuadorian National Aquaculture Chamber said Sept. 25.
Shrimp prices have risen significantly since electricity rationing began in September. Platts' Ecuador Shrimp Marker was $5,600/metric ton FCA Guayaquil on Oct. 7, up from $4,800/metric ton on Sept. 2. The intensified energy rationing in Ecuador could lead to a reduction of $75 million per month in shrimp exports. Shrimp prices may continue to rise as Indian Vannamei shrimp are in their low season between the first and second crop of the year, leading to tight supplies. Floods in India in early September also negatively affected shrimp seeding.
One bright spot for shrimp producers is that the threatened strike by the International Longshoremen's Association, which would have severely limited US port capacity, has been averted. The US relies on imports for 80% of its seafood supply.
Today is Friday, October 25, 2024, and here is today’s essential intelligence.
US Solar Manufacturing Soars, But Gaps And Uncertainty Persist
US solar panel production capacity has more than quintupled since President Joe Biden signed the Inflation Reduction Act in August 2022, according to industry and federal government data, marking a major milestone in the Biden administration's mission to bring home critical clean energy supply chains.
—Read the article from S&P Global Commodity Insights
US Local Governments Credit Brief: California Counties And Municipalities Means And Medians
California counties and municipalities (local governments or LGs) have maintained stable or improved credit quality overall during the past two fiscal years, reflecting a strong economic recovery since the onset of the global pandemic. However, negative economic pressures such as elevated price levels fueled by high inflation, albeit moderating, has resulted in slowing growth in revenues and are presenting budgetary challenges with many cities forecasting general fund deficits in fiscal 2025 and beyond.
—Read the article from S&P Global Ratings
Private Equity Investment In Micromobility Set To Decline For 2nd Straight Year
The value of global private equity and venture capital transactions in the micromobility sector is on track to drop for a second consecutive year in 2024 as investors demand companies prioritize profitability over growth. Micromobility refers to lightweight vehicles usually used for short distances such as bicycles, scooters, motorized cycles and mopeds. In the first nine months of 2024, the global micromobility sector raised $142.9 million from private equity-backed deals, just 26.9% of the $531.6 million secured in all of 2023.
—Read the article from S&P Global Market Intelligence
Atlantic Supramax Scrap Market Sluggish In Week 42 Amid Limited Cargoes
The Supramax segment in the Continent and Baltic Sea regions endured a trading week that remained weak, mainly caused by fewer cargoes, which led to subdued levels for the week of Oct. 14-18. The market experienced sluggish activity for the week, and prices seemed to decrease. However, there was a spike, making prices firmer midweek, but they mostly fell Oct. 18.
—Read the article from S&P Global Commodity Insights
Listen: China’s Critical Minerals Dominance And The Implications For The Global Energy Transition
With the world's renewable energy capacity reaching record levels, attention has shifted to the risks involved in sourcing critical minerals such as lithium, cobalt, nickel and graphite, essential for sustaining these industries. China's dominance over global critical minerals supply chains has led the US, EU and other major consumers to diversify their foreign sources while also developing domestic resources and strengthening recycling capacity.
—Listen and subscribe to the podcast from S&P Global Commodity Insights
Data Centers: Welcome Electricity Growth Will Fall Short Of US Data Center Demand
The rising number of data centers is generally supportive of the North America investor-owned regulated utility industry's credit quality. S&P Global Ratings expects the growth will drive electricity sales and enable the industry to spread its fixed costs over a wider base of ratepayers.
—Read the article from S&P Global Ratings
Webinar: Sustainable Evolution In New Age Vehicle Manufacturing - A Drive Towards A Greener Economy (Nov. 7, 2024)
Join us in this webinar to hear about the evolution of trends in manufacturing technologies for vehicles. We will focus on the rapid shift to Battery Electric Vehicles (BEVs) and how Original Equipment Manufacturers (OEMs) have developed new processes within production to accommodate this shift. These new processes have a direct impact on the overall profit per vehicle.
—Register for the webinar from S&P Global Mobility