Shrimp market: Fear of inflation and declining demand

Shrimp market: Fear of inflation and declining demand

In comparison with the same period of last year 2021, shrimp prices of this year 2022 are going down although it is not main harvesting season now. The trend is quite abnormal! To explain for the strange trend, we suppose that the global demand is being so weak due to high inflation in many countries and Ukraine - Russia war made disruption of supply chains, the high possibility of economic recession is foreseen.

Progress of Vannamei shrimp price of 60 pcs/kg of 2021 and 2022 - Photo: UCN

Although shrimp exports tend to recover in August and September, some businesses are still worried about shrimp export prospects in the last months of the year. Mr. Ho Quoc Luc, Chairman of the Board of Directors of Sao Ta Food Joint Stock Company, said that the high inflation, the unrecoverable international logistics system will be the big difficulties of the shrimp industry in the last months of the year. 

Low prices of Euro, British Pound, and Japanese Yen reduce purchasing power. The dollar is anchored at a high level but the pressure on cheap shrimp from Ecuador and India is strong. 

According to Mr. Le Van Quang, General Director of Minh Phu Seafood Corporation, the second half of 2022 will be a difficult period for the shrimp market because of inflation, diseases and weather.

“This year, the disease situation on shrimp is more complicated than every year. The weather is quite rainy, causing farmers to harvest shrimp early and also limit stocking. In particular, the inflation situation in other countries is high, so the consumption market from now to the end of the year will be difficult," said Mr. Quang.  

At the Conference on Seafood Market Trends and Demands after COVID-19, Ms. Le Hang, Communications Director of VASEP, said that global seafood demand has peaked and will decline in the second half of 2022.

The reason is that the USD appreciation reduces demand in many markets; including the EU and Japan. Along with that, the increase in inventories makes importers limit their purchases and find ways to lower import prices.

Rising inflation reduces spending on seafood, and consumers will also prioritize species that are reasonably priced in line with declining incomes. Small shrimp, pangasius, fish cakes, surimi, small sea fish are still in high demand but prices will decrease compared to the first half of the year.

Source: SEABINA GROUP rewriting based on internet source