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Shellfish Update: Shrimp

Look for availability of black tigers to tighten in early 2006


November 01, 2005

Black tigers (Penaeus monodon) ruled the shrimp-farming world in the 1990s; global cultivation of the species totaled around 600,000 metric tons annually.

But the tiger’s days at the top may be numbered.

As Asia’s production of Pacific whites (P. vannamei) rapidly increases due to its numerous economic advantages at the farm level (see Pacific whites, p. 62), black tigers’ market share is dwindling.

Monodon represented 40 percent of global farmed-shrimp production of nearly 1.5 million metric tons in 2002, down from 60 percent in 2001, reports the Food and Agriculture Organization.

Black tigers are still readily available in the United States — for now.

“If supply keeps coming, prices are going to go down,” says one New Jersey importer. “If there were no tariffs, we’d be swimming in the shrimp right now.”

So far, the tariffs the U.S. government slapped on shrimp from six Asian and South American countries at the beginning of 2005 have slowed the flow of shrimp into the United States.

But through August, imports, which represent 85 to 90 percent of the domestic shrimp supply, were still up 1 percent, to almost 675 million pounds, from the same eight-month period in 2004.

Tariff-free countries such as Indonesia and Malaysia picked up the slack by boosting exports considerably, while tariff-burdened Thailand, the United States’ No. 1 supplier, increased exports 24 percent, to nearly 206 million pounds. So it’s expected there will be enough shrimp around to get retailers and restaurateurs through the year-end holidays.

However, a supply shortage may arise in early 2006.

Three-and-a-half months earlier than anticipated, the European Union reduced tariffs on Thai shrimp from 20 to 7 percent for processed product and from 12 to 4.2 percent for fresh product, which may divert shrimp from the United States to Europe.

The cutback was initially scheduled to go into effect Jan. 1, 2006, but the EU moved it up to mid-September to help Thailand’s shrimp industry recover from last year’s Indian Ocean tsunami.

Thousands of boats, which catch the “mother prawns” used to
produce black-tiger broodstock, and hundreds of hatcheries were
destroyed.

With less broodstock to stock ponds early this year, fewer shrimp are being harvested now.

The United States may also reduce or even revoke tariffs on Thai and Indian shrimp. Under a rule called “changed circumstances review,” the International Trade Commission is reconsidering whether to incorporate the tsunami’s effect on the countries’ shrimp industries into its early-2003 decision to hit Thai and Indian shrimp with tariffs ranging from 6 to 13
percent.

But in late September, the ITC postponed a hearing on suspending tariffs on Thai shrimp due to Hurricane Katrina, which ravaged the upper Gulf of Mexico’s shrimp industry in late August.

Furthermore, the second round of bonds importers must post to purchase tariff-burdened shrimp is due in early 2006 (the first round came in early 2005).

Many importers may go out of business because they’re unable to come up with the inordinate amount of money needed to post the bonds, says Rick Martin, executive director of Red Chamber Co. in Vernon, Calif., one of the nation’s largest shrimp importers.

The bonds “have put a damper on things,” concurs David Silverstein of MB Seafood in Flushing, N.Y. “They’ve handcuffed us for a while.”

As a result, shrimp prices are expected to increase across the board in early 2006.

“That’s the problem today. Volatility in the marketplace is uncontrollable,” says the New Jersey importer, who’s dealing less in shrimp as a result.

In mid-October Urner Barry quoted headless, shell-on Southeast Asian tigers at up to $7.30 for U15s, $5.50 for 16-20s, $4.40 for 21-25s, $4 for 26-30s, $3.60 for 31-40s and $3.20 for 41-50s. Indian tigers fetched up to $7 for U15s, $5.05 for 16-20s, $4.05 for 21-25s, $3.40 for 26-30s, $3.20 for 31-40s.

Headless, peeled, cooked Southeast Asian tigers were commanding up to $8 for 16-20s, $6.65 for 21-25s, $5.65 for 26-30s, $4.30 for 31-40s, $4.05 for 41-50s and $3.65 for 51-60s; prices of 31-40s, 41-50s and 51-60s were on the rise. Headless, peeled, cooked Pacific whites cost about the same.

Black tigers get their name from their gray to black stripes on their gray to bluish shells. Their cooked shells turn bright red, and their white flesh is tinged with red if cooked in the shell and orange if cooked in peeled form.

Their meat is also softer than that of other species. Farmed black tigers have a mild, almost bland flavor compared to the pronounced taste of wild Gulf shrimp.

As for Mexican shrimp, availability is on par with last year. Through August, Mexico exported 13.4 million pounds to the United States, up 2 percent from 2004.

Mexico is expected to increase production in 2006, reports Antonio Diaz, president and CEO of Ocean Garden Products in San Diego, the nation’s largest Mexican-shrimp importer.

In mid-October, wild No. 1 Mexican browns brought up to $7.95 for U15s, $6.15 for 16-20s, $5.10 for 21-25s, $5 for 26-30s and $4.70 for 31-35s.

In the Gulf, production of small PUDs is off due to Hurricanes Katrina and Rita, which annihilated countless boats, docks and processing plants along the upper Gulf in less than a month.

Louisiana, the state hardest hit by the storms, accounts for more than half of the 150-million-pound Gulf shrimp catch.

The domestic shrimp industry was already having a tough year before the hurricanes. Through July, Gulf landings were down 14 percent, to 56.7 million pounds, from 2004. In May alone, the harvest totaled only 11.4 million pounds, down 43 percent from the five-year average.

As a result, prices of small PUDs were on the increase in mid-October, when Urner Barry quoted 31-40s at up to $3.20, 41-50s at $2.85 and 51-60s at $2.60; 16-20s were holding steady at up to $3.70, 21-25s at $3.60 and 26-30s at $3.40.

Headless, shell-on Gulf browns were tagged at up to $7.30 for U15s, $8.85 for 16-20s, $4.95 for 21-25s, $4.50 for 26-30s, $4.30 for 31-35s, $3.85 for 36-40s and $3.45 for 41-50s.

— S.H.

 November 2005 - SeaFood Business 

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