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COMMENTARY & ANALYSIS
 
August 30 2017

Shrimp farming's recovery postponed again?

By ERIC J. BROOKS
An eFeedLink Hot Topic
 
 
  •  For a fourth straight year, predictions of a strong rebound in world shrimp output failed
  •  Output at former top exporters remains up to 50% below peak levels. New, emerging producers cannot grow as quickly as before without risking disease outbreaks
  •  Despite new, sustainable disease management methods, output will be no higher in 2017 than two years ago
  •  With no apparent way of boosting stocking densities back to early 2010 levels without risking disease outbreaks, new suppliers may need to emerge from Africa or Latin America
 
At almost every conference since 2013, shrimp industry executives confident predicting that within two or three years, output will finally exceed its early 2010s peak output. Within months, output stagnates and projections are revised downwards. The same thing happens next year –and this has again occurred in 2017.
 
Leading the way in shrimp sector disappointments is Thailand. Robins McIntosh, CP's senior vice-president for agribusiness announced at August 2016's The Aquaculture Roundtable Series (TARS) conference in Phuket, Thailand, that his company had developed a means of flushing accumulated wastes that harbor EMS pathogens. He predicted a 25% Thai shrimp output increase for 2016 (to 300,000 tonnes) and 20% in 2017.
 
By January 2017's Global Seafood Market Conference in San Francisco, USA, McIntosh said that EMS and EHP still dogged Thai shrimp farms and 2016 production was only 250,000 to 260,000 tonnes. He scaled back his 2017 output estimate from 350,000 tonnes to 300,000 tonnes  --but worse was to come.
 
Blaming heavy rains, Q1 2017 Thai shrimp production defied its predicted even this conservative output rise and came in 6% below what was produced a year earlier. Then, in an early June interview with Undercurrent News, Preerasak Boonmechot, managing director of Thai Union's shrimp division estimated 2017 output in the 260,000 tonne to 275,000 tonne range –far below the 350,000 tonnes forecast several months earlier. –Moreover, Boonmechot let the cat out of the bag, blaming, "ongoing disease issues" for another disappointing year.
 
Having once produced 600,000 tonnes of shrimp annually, it will be the fourth consecutive year that Thai output remains below 300,000 tonnes. Moreover, Thailand is hardly alone in being unable to boost stocking densities back to old levels. China's even sharper shrimp production decline is why world shrimp output will be probably around 3.80 to 3.90 million tonnes in 2017, even though industry sources projected 2017 output to exceed 4.5 million tonnes just two years ago.
 
In China's case, domestic shrimp supplies and consumption are on a collision course. On one hand, China's shrimp consumption jumped from 0.76 million tonnes in 2005 to 1.06 million tonnes in 2010 and 1.70 million tonnes in 2016.   On the other hand, Global Seafood Marketing Conference panelists estimated that China's output of white leg shrimp declined by 150,000 tonnes in 2016 –far more than the cumulative annual output increase of expanding shrimp producers such as India and Ecuador.
 
Since 2010, China has suffered cumulative shrimp output declines totalling 500,000 to 700,000 tonnes. Moreover, the quality of Chinese production was impacted as much as the quantity: To avoid late grow-out period mortality, Chinese growers harvest them early, leading to a shortage of large size shrimp.
 
To bridge this yawning gap between Chinese shrimp supply and demand, 'official' imports skyrocketed from 2011's 53,000 tonnes to total 200,000 tonnes in 2015 –but the actual amount is more than double this volume.A January 2017 Undercurrent News report uses Vietnamese customs data to show that in 2016, Vietnam exported 270,000 tonnes of shrimp to China –and this does not show up in official Chinese statistics.
 
At least 160,000 tonnes of this shrimp came from Ecuador, with India supplying most of the rest. It was then re-exported into China via black market channels.
 
In 2017, Chinese traders will smuggle in well over 300,000 tonnes of Indian and Ecuadorian shrimp. When smuggled shipments from Vietnam are added to 'official' shrimp imports, the real 500,000+ tonne import volume swamps Chinese shrimp exports, which have slumped down to around 200,000 tonnes. This means that the world shrimp market has lost a large, important supplier: Formerly a leading exporter, China is now the world's second largest net shrimp importer after Japan.
 
With collective Chinese and Thai shrimp output slumping by more than a million tonnes from levels taken for granted five years ago, it is very difficult even for rapidly expanding producers such as India and Ecuador to bridge the resulting supply deficit –especially now that their own output is no longer growing rapidly.
 
As production rises and new ponds accumulate pathogen rich waste faster than was expected, Indian shrimp producers face a mounting number of health challenges. Three years ago, analysts believed India would be producing over 600,000 tonnes annually by 2017, not the half million tonnes now hoped for. At May 2017's Aqua Aquaria India, CP's McIntosh noted "While India is expected to produce 500,000 metric tonnes of shrimp in 2017, the average rate of farm [shrimp] survival is only 50%. Productivity [growth] is reducing year on year, with the produce being hit by white spot syndrome [WSSV], which is the single largest pathogen affecting shrimp farming in India."
 
Similarly, after expanding output by seven times and exports 10 times from 2000 through 2015, Ecuador finds it too cannot undertake yesteryear's rapid output increases. Ecuador finds that diseases and mortality take off when stocking densities are raised to a fraction of levels taken for granted in East Asia. From the heady 10%+ growth of previous years, Ecuador's shrimp output and exports have increased approximately 4% annually in 2015 and 2016.
 
It was initially hoped 2017 Ecuadorian shrimp production and exports would grow by 7% to 9% and total p to 406,000 tonnes. More recently however, a sharp drop in finishing weights (due to heavy rains earlier in the year), cold night time temperatures and a larvae shortage arising from a late 2016 vibrio outbreak are constraining earlier optimistic forecasts.  Export shipments now look set to rise 4% to 5%, from last year's 372,600 tonnes into the 387,000 to 392,000 tonne range.
 
On one hand, former top exporters China and Thailand can only produce 50% to 60% of the shrimp volume they once did. On the other hand, top world suppliers India and Ecuador can only grow their production at single digit rates. At the same time, smaller shrimp exporters such as Indonesia and Vietnam, while not suffering such catastrophic output declines, have stagnant, below peak output constrained by stocking density limitations.
 
Moreover, when conventional means of boosting stocking densities were tried, top shrimp importers including America, Australia and the EU rejected shipments for having too many antibiotics or banned, unsafe supplements.
 
No doubt technical solutions to the EMS, WSSV, EHP and other stocking-density related problems dogging shrimp growers will eventually be found –but after five years, we don't know exactly when this will happen.
 
Hence, it might be a good time to ask an important question: Do the risks and returns of establishing new shrimp farming operations in untouched frontier areas ranging from Africa to Brazil to Myanmar exceed the additional earnings to be gained from boosting already high Asian shrimp stocking densities? The longer it takes to re-establish growth in stocking densities, the more meaningful this question becomes.
 


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