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Shellfish Focus: Pacific white shrimp
A colossal production shift in Asia means more vannamei for U.S. buyers
November 01, 2005
All it takes is a glance at production figures to realize that Pacific whites (Penaeus vannamei) are quickly emerging from the shadow of black tigers (P. monodon) to captivate the shrimp-farming world.
Vannamei represented 38 percent of Asia’s total shrimp production of 1.6 million metric tons in 2003, up from 27 percent in 2002. In Thailand — the world’s No. 1 shrimp exporter — vannamei is expected to account for 90 to 95 percent of the country’s total shrimp production in 2005. In 2004, it was split 50-50 between vannamei and monodon.
Vannamei is native to Latin America, from Mexico’s west coast to Peru. Ecuador and Panama started farming the species commercially in the early 1970s. The species was introduced to Asia in the late 1980s, and China and Taiwan began cultivating it commercially in 1996. Thailand and other Southeast Asian countries soon followed.
As a result, global vannamei production nearly quadrupled, to 530,000 metric tons, from 1996 to 2002. Asia yielded 316,000 metric tons of vannamei in 2002, compared to 214,000 metric tons in Latin America. In 2003, Asia cranked out almost 500,000 metric tons.
So why is Asia rapidly shifting shrimp production from black tigers to Pacific whites?
Surprisingly, it’s not due to demand in the United States, where shrimp is the most popular seafood item. It’s a matter of economics at the production level, according to a 2004 Food and Agriculture Organization report.
To farmers, vannamei is more appealing than monodon because:
• It grows faster. Vannamei’s growth rate averages 1 to 1.5 grams per week, compared to 1 to 1.2 grams per week for monodon. Vannamei can be harvested at 100 to 120 days; monodon at 150 to 180 days.
• It spawns faster. Vannamei females reach a minimum spawning size of 35 grams in only seven months, while monodon females take 10 to 12 months to attain a minimum spawning size of 100 grams.
• It tolerates higher stocking densities. Vannamei is usually cultured at densities of 60 to 150 shrimp per cubic meter, but can be raised at up to 400 shrimp per cubic meter.
• It tolerates lower salinities and temperatures. As a result, vannamei can be farmed year-round, even from October to February, Asia’s off-season for black tigers.
• It requires less protein. In Thailand, vannamei feed usually contains 35 percent protein, compared to 40 to 42 percent protein for monodon feed. As a result, vannamei feed costs 25 to 30 percent less than monodon feed. Throughout Asia, a kilogram of vannamei costs an average of $2.33 to produce, compared to $3.41 for a kilogram of monodon.
• It’s more disease resistant, because availability of specific-pathogen-free (SPF) vannamei broodstock is far greater than that of SPF monodon broodstock. As a result, vannamei’s survival rate averages 80 to 90 percent in high-density Thai and Indonesian ponds, compared to 45 to 55 percent for monodon.
“Some tiger farmers are barely surviving, so they switch to whites and next year they’re building a new house,” says Brian Goldstein, CEO of Kona Bay Marine Resources in Honolulu.
“For farmers, the economics of whites are substantially better than tigers. Mostly it boils down to the availability of SPF broodstock.”
The disease-free advantage
Kona Bay is one of three U.S. companies that Thailand in 2004 granted permits to sell SPF vannamei broodstock to its farmers. The others are High Health Aquaculture, which with Kona Bay operates out of the Natural Energy Laboratory on Hawaii’s Big Island, and Shrimp Improvement Systems in Plantation Key, Fla.
Developed at Hawaii’s Oceanic Institute in the late 1980s, SPF vannamei broodstock is guaranteed to be free of several common shrimp diseases, including the white-spot, yellow-head and Taura viruses, says Goldstein.
Goldstein expects Kona Bay’s production to double as a result of the deal with Thailand, the first country to establish a permitting program for both producers of SPF vannamei broodstock and shrimp farmers.
Thailand’s move stems from a widespread misunderstanding among Asian farmers that Pacific whites are disease resistant, which is not the case. SPF vannamei broodstock is assured to be virus-free when the farmer receives it, but the shrimp can become infected with a virus if exposed during cultivation. In fact, vannamei is highly susceptible to white spot and Taura.
Additionally, some Asian farmers began importing non-SPF vannamei broodstock once they recognized the financial advantages of farming Pacific whites. For example, Taura, imported with wild broodstock from Latin American, caused significant vannamei mortalities in Taiwan in 1999, reports the FAO.
Fear of the introduction and spread of disease prompted most Asian countries to prohibit imports of vannamei broodstock. But in the past few years, they’ve revoked their bans; Malaysia and the Philippines followed suit just this year. Even India, one of the last holdouts, is looking at lifting its ban, says Goldstein.
Now that measures are in place to prevent non-SPF vannamei broodstock from entering most Asian countries, vannamei production is taking off.
“The shift is very much supply driven,” says Goldstein. “The market wasn’t asking for whites.”
In fact, industry veterans like Goldstein say the average consumer can’t distinguish cooked Pacific whites from black tigers. Others aren’t so certain.
“I’m not real sure what the average consumer thinks,” says Ernie Wayland, executive VP of Los Angeles-based Rubicon Resources, one of the nation’s largest shrimp importers.
“If there’s anything negative about whites, it’s that they contain less flavor and less color than tigers. Tigers are more visually appealing when cooked and have more snap to them.”
It may also be difficult for the average consumer to tell Pacific whites from Gulf whites (P. setiferus). But vannamei is creamy white, while setiferus is grayish-white.
P. stylirostris, another species of Pacific whites that’s farmed mostly in Mexico and Brunei, is white with a greenish or bluish tint and is a tad saltier than vannamei. Both vannamei and stylirostris are firm, sweet and mild and turn whitish-pink when cooked.
Perhaps vannamei’s biggest drawback is its smaller size. Its growth slows significantly once it reaches 20 grams. As a result, black tigers are much more available than Pacific whites in large sizes such as 16-20s, U15s and U12s.
A good buy
Regardless of its smaller size, Pacific whites are certainly an attractive buy.
“It’s been a dull year for [importers],” says Wayland. “But it’s been a great year for program buyers and consumers.”
In mid-October, headless, shell-on Asian-raised whites held firm at up to $4.25 for 21-25s, $4 for 26-30s, $3.30 for 31-35s, $2.95 for 36-40s, $2.80 for 41-50s and $2.65 for 51-60s, according to Urner Barry in Toms River, N.J.
Latin America-raised whites held steady at up to $4.70 for 21-25s, $4.30 for 26-30s, $3.60 for 31-35s, $3.10 for 36-40s, $2.90 for 41-50s and $2.85 for 51-60s.
Wild No. 1 Mexican whites fetched up to $8.65 for U15s, $6.35 for 16-20s, $5.15 for 21-25s, $4.70 for 26-30s and $4.20 for 31-35s. Wild Central and South American whites commanded up to $8.40 for U15s and $6.15 for 16-20s, reports Urner Barry.
Prices held firm this fall because U.S. inventories are high.
“Freezers are 90 to 95 percent full, if not more,” says David Silverstein of MB Seafood in Flushing, N.Y.
That’s because the product ordered in late spring is now arriving and being held in freezers. Anticipating that the market had bottomed out, several big retailers with program, or contract, business committed for the year-end holidays a few weeks earlier than usual this year.
A whopping 124 million pounds of shrimp hit the U.S. market in August, up 54 percent from 2004, according to the National Marine Fisheries Service. More than 45 million pounds came from Thailand alone, nearly triple 2004’s sum.
In the first eight months of 2005, the United States imported almost 675 million pounds of shrimp, up 1 percent from 2004, surpassing last year’s year-to-date total for the first time this year.
However, late spring’s buying frenzy was only temporary.
“It’s still quiet,” says Wayland. “The market’s in limbo. We’re not seeing much movement. But September is a notoriously lackluster month. Spot business in September was almost non-existent.”
“There’s always business out there, but these are very trying times,” he says. “With all the catastrophic events in the world lately, consumers are watching what they spend. Fuel prices are through the roof, and it’s taking disposable income off the street.”
October wasn’t much of an improvement. For importers, the hope is spot business will pick up in November and especially December as retailers and restaurateurs fill last-minute needs.
But importers looking to reload for early 2006 were struggling to do so in the fall because Asian packers were still scrambling to fill orders placed in late spring, driving up raw-material prices overseas, says Wayland.
A new crop of vannamei is due to be harvested in November and December, but that product won’t reach the U.S. market for six to eight weeks, and it’s expected to cost more. “So there may be an uptick in the market” in early 2006, he explains.
But importers are more concerned with the bonds they’re forced to post as a result of a new law designed to prevent tariff evasion with farmed seafood and produce (see cover Newsline story).
In early 2005, the U.S. government hit shrimp from Thailand, China, India, Vietnam, Ecuador and Brazil with tariffs of up to 113 percent, as a result of an antidumping petition shrimp fishermen and processors from North Carolina to Texas filed at the end of 2003.
The tariffs have slowed the flow of shrimp into the United States, though imports were still up, albeit slightly, through August as previously noted.
But importers fear that the inordinate amount of money they must post in bonds will drive them out of business and change the landscape of shrimp importing when the second round of bonds is due in early 2006. They also fear the bonds will lead to a supply shortage and drive up prices after the year-end holidays.
The bonds already are making for a volatile market.