Significantly affected by simultaneous demand and supply shocks
As we enter 2021, we look back at developments in the marine shrimp demand and supply sector in 2020. The worldwide pandemic lockdown in March was a significant disruption as for the first time in recent history, the industry faced both a demand shock as well as a supply shock simultaneously. Initially, logistics was in turmoil as containers were stuck in the ports and unable to be at the
right place and the right time for shipment.
Furthermore, in Q2, many shipping companies downsized their container capacity and today, the consequence is a shortage of containers and longer waiting time for confirmation. In Q4, China’s inspection of all seafood imports for the virus has been intensified leading to a waiting time of as long as 3 weeks at the main ports.
Retail vs food service demand
In the US, the food service sector accounts for 70% of all shrimp imports. In Q2 the lockdown affected the restaurant business with reduced shrimp consumption by a half. The retail segment, however, improved by 40% due to more cooking done at home. The lower prices also attracted higher sales. By summer, when restaurants were open again, the US import market recovered, and US imports in 2020 have been projected to exceed that of 2019 (700,000 tonnes) by 8%, according to Rabobank (undercurrentnews.com).
In China, the second largest market in the world after the US, the food service sector recovered but the retail sector suffered when the virus was detected on shrimp packaging in July/August, especially from the imports originating from Ecuador. “With the virus detected on imports, there was enhanced control; we had to publish online DNA tests to keep seafood sales steady. The nucleic acid test is a gate-pass,” said Feng Yu, Seafood Procurement Manager at JD.com, a major seafood online retailer in a presentation at GOAL 2020 conference in October.
The effects on major producing countries vary. Towards the end of 2019, both Ecuador and India were competing for the China market. In 2020, Ecuador and India shared the same problem − lack of workers in processing plants. Guayaquil, Ecuador’s centre for shrimp processing, was a Covid-19 hot spot and workers were scared to return to work. While in India, workers were forced to return to their home states during the lockdown. So, both countries faced labour shortages. However, the similarity ends there.
While Indian farmers skipped production cycles due to low prices, Ecuador continued to farm. India harvested small sized shrimp and processed value-added shrimp while Ecuador continued with larger size shrimp and produced nearly all HOSO. HOSO shrimp is primarily demanded by the food service sector which suffered significantly more than the retail sector. Ecuador mitigated the situation by pivoting away from China, focussing instead on the US and EU markets. In August, Ecuador exported 52,800 tonnes of shrimp and managed a split of EU, US and Asia export market at 31%,30%, and 33% respectively. This still did not help much as Ecuador had the lowest ex-farm price of all the major producing countries. At the end of August, ex-farm USD shrimp prices for size 60/kg were: Ecuador 2.80/kg; India 3.82/kg; Vietnam 4.41/kg; Indonesia 5.10/ kg; Thailand 5.11/kg and Malaysia 5.50/kg. The latest China import data for March-November 2020 showed about 400,000 tonnes compared to 650,000 tonnes for the full year 2019 (undercurrent news.com).
China’s retail segment
In discussing consumption trends in 2020, Yu said that online channels have helped to introduce new seafood products to inland cities and represent the boom in retail. JD imports 40% of its seafood and procures 60% from domestic production. “Online retail contributed to customer education too. We worked with chefs on how to prepare seafood. But there are hundreds of online brands which also increases competition.”
JD had quickly adapted by actively giving information on the products. With virus detected on imports, Yu said there was enhanced control at JD on its suppliers. In tier1 cities, the preference has always been for high quality and sustainable seafood. Yu added that the company focusses on generating consumer confidence on seafood and encourages suppliers to demonstrate their efforts on food safety, certification etc.
Lower prices
The average shrimp import price/kg has declined since the highs of 2014 (Shrimpinsights). A composite for the major markets of US, EU and China shows a price decline from USD11.16/kg in 2015 to USD7.41/kg in 2019. In 2020, prices declined further and the average price in China of imported Ecuador shrimp declined to just above USD5/ kg. In the US, prices declined during the first half of the year but improved in the third quarter due to strong retail demand. Asian prices did not drop much further below the 2019 level because lower production weakened the effect of the Covid-19 related drop in global demand. Moving forward, prices may continue to show a positive trend till January 2021 but are likely to ease due to high inventories especially in the US and EU and due to a lack of demand from China after the Chinese New Year. Prices are expected to decline further in the first half of 2021 but then firm towards the second half of the year.
Demand in 2021
How will demand unfold in 2021? Panellists at the UCN webinar gave some insights on consumption. “Customers are also more flexible, accepting different product forms which helped some importers that do not import value added products,” said Jeff Sedacca, Sunnyvale Seafood Co. Jim Gulkin, Siam Canadian Group added that consumption patterns have changed in 2020, with more consumption at home. In the long term, the resumption of consumption will rest on the speed of recovery of major markets for the food service sector such as cruise and tourism industries.
Robins McIntosh, Charoen Pokphand Foods, said that before this pandemic, there had been balanced demand and supply; producers are waiting for the demand situation to improve. It will depend on how much China will be able to absorb. “We need to see where consumption is happening and production will be ready to meet the demand.
Production in 2020
In this review on production estimates, in addition to those from the industry for 2020, we present some figures from panellists at various webinars. The forecast for production in 2021 was presented at GOAL 2020. In Aqua Culture Asia Pacific, September/October 2020 Soraphat Panakorn reviewed some supply and production challenges until August 2020.
India
In the first half, production was affected by the lockdown, shortage of post larvae (PL) and costly transportation to farms in the north and west coast, and poor survival rates. Industry was affected by low ex-farm prices in March 2020 (with size 100/kg at INR160/kg), and delays in stocking. The uncertainties throughout the year affected production. Total production estimates for 2020 ranged from 575,000 to 620,000 tonnes resulting in a drop of 29% to 22% of production in 2019 (800,000 tonnes).
China
Seafood marketeers estimated a 20% reduction on production from the 500,000 tonnes produced in 2020 (UCN, 2020). “Overall stocking was less than in 2019,” said Vincent Lin, Grobest Group (SAP, 2020). “About 40% of ponds in Guangdong, the leading shrimp farming province, and 20% in other parts of China remained unstocked.” When the pandemic subsided, decapod iridescent virus 1 (DIV1) reappeared with 60% of ponds infected. In July, when the coronavirus was detected in shrimp imports, prices dropped to a low − CNY22/kg for size 60/kg. Prices later surged with demand in August.
Vietnam
Relative to other Southeast Asian countries, the pandemic had little effect on shrimp farming. Grobest Group’s Samson Li expected a small decrease of 9% to 570,000 tonnes of total production in 2020, from 630,000 tonnes in 2019 and production to recover in 2021 to 2019 levels of 365,000 tonnes of vannamei shrimp and 214,000 tonnes of monodon shrimp (SAP, 2020). In contrast, others gave lower estimates for vannamei production in 2020; 360,000 to 400,000 tonnes citing significant EHP outbreaks and pond failures. Monodon shrimp production in 2020 could be from 100,000-150,000 tonnes. “The stocking density of vannamei shrimp depends on the farming environment,” said Dr Loc Tran, ShrimpVet Lab. It ranges from 30-50PL/m2 in semi-intensive and low saline culture, 50-100PL/m2 in earthen ponds and 60-70PL/m2 when stocking large juveniles to harvest large 50g shrimp in large ponds, in a multiphase farming system (SAP, 2021).
Indonesia
In the early part of the year, stocking was delayed because of transport disruptions for PL deliveries. Fewer farms were operating; some stopped operating and resumed only in the later part of the year. “Farmers have changed operating procedures, stocking 100-125PL/m2 from the usual 150-200PL/m2 and they also start siphoning ponds from 20 days,” said Haris Muhtadi, PT CJ Feeds.
While post larvae sales remained unchanged, industry’s production estimate was a 14% drop, bringing 2020 production at 258,000-300,000 tonnes from the 300,000 to 350,000 tonnes in 2019. Future output is expected from new farms expanding aggressively in other islands such as Batam, Maluku, Kalimantan, Sulawesi and Sumbawa. In the first half, production was of smaller size shrimp 40- 50/kg but in the second half, larger sizes of 25-40/kg were produced which contributed to higher production volumes. Black tiger shrimp contributed 14% of the production.
Thailand
Official figures by the Department of Fisheries, Thailand, gave production for the first 11 months at 257, 836 tonnes of vannamei shrimp and about 11,000 tonnes of black tiger shrimp. The full year’s production estimate by industry may show a 26% decline in total production from 317,839 tonnes in 2019 (DOF, Thailand). A difference from the production in 2019 would be the production of larger size shrimp in 2020.
According to Olivier Decamp, INVE Aquaculture, the industry’s new endeavour is to maintain dissolved oxygen in culture environment at 5-6ppm from the earlier 4ppm, and the preferred stocking density is 80-100PL/m2 (SAP, 2021).
Malaysia
Production is expected to go down by 8-12%, possibly at only 42,000 tonnes of both vannamei (70%) and monodon shrimp (30%), according to industry. To compensate for downtime losses in Q2, production has extended to Q4. Production in East Malaysia was significantly affected by Covid-19, since it is entirely dependent on the export market. While most of the vannamei shrimp farms survived with local market demand picking up almost all the production, farms producing large monodon shrimp, for the food service segment had reduced sales. In 2020, there were more outbreaks of EHP than AHPND.
Philippines
Chingling Tanco, MIDA Trade Ventures, said that in 2020, with flight disruptions, larger farms in the Visayas and Mindanao could not reach the main market in Manila. Usually, the shrimp industry focusses on the export market in the first half of the year and the local market with better prices in the second half. But demand was low for both segments in 2020 (USSEC, 2020). Therefore, it was likely that farmers had reduced their production. The estimate by McIntosh was 57,000 tonnes (UCN, 2020) However, production could be less at 48,000 tonnes, based on lower imports of broodstocks in 2020.
Bangladesh
In Bangladesh, stocking of farms was probably lower due to Covid-19 and Cyclone Amphan which came in May 2020. Industry in Bangladesh expects production to be similar to previous years but these developments suggest that monodon shrimp production may go down this year, as will prices. In 2020, prices were weak; medium size black tiger shrimp (size 21-44/kg) was BDT895/kg (USD10.5/ kg) in February and dropped to BDT695/kg (USD 7.6/kg) in June.
Diseases in vannamei shrimp farming
The situation with WFS, AHPND and EHP in Vietnam, India, Indonesia and Thailand was explained by industry leaders during the virtual TARS Leading Conversations on managing AHPND, EHP and WFS. Loc Tran highlighted muscle necrosis (see box). Recently, AHPND is a serious problem in Indonesia with about 30% of farms infected, mostly in the older areas of Lampung, Medan and on Java island. In India, there was a higher virulence of WSSV and tests indicated a new strain (SAP, 2021).
“Although prevalent in China, DIV1 has yet to be detected in Thailand and elsewhere,” said Dr Kallaya Sritunyalucksana, BIOTEC, Thailand (WAS, 2020). But with the possibility of transfer across species, especially in polyculture, she recommended other countries to start testing on Penaeus vannamei and Macrobrachium sp. using the primer developed. Routine PCR testing of polychaetes including for DIV1 and use of only pathogen- free polychaetes were recommended. There are SPF polychaetes in Thailand.
References
GOAL, 2020. www.gaalliance.org
SAP, 2020. Global shrimp markets: Looking Beyond the pandemic. 24-25 September 2020. Society of Aquaculture Professionals, India.
SAP, 2021. Overcoming the hardships in shrimp farming – Lessons from India and elsewhere. 7-8 January 2021. Society of Aquaculture Professionals, India.
UCN, 2020. Global Shrimp Market Outlook, 9 September 2020. www.undercurrentnews.com
USSEC, 2020. Reconnecting Seafood Markets Virtual Event, 28 July 2020. US Soybean Export Council.
WAS, 2020. Next Generation Aquaculture: Innovation and sustainability will feed the world, 14-16 December 2020. www. was.org
Muscle necrosisThis bacterial disease is usually associated with intensive farming and it can cause mortality as well. This could be 0.5% of mortality every day, but the cumulative mortality in the pond could be very high. There is a possibility of farmers misdiagnosing the affected animals when they see opaque muscles. Besides that, IMNV could be responsible for muscle necrosis. Based on some literature review and research, it was concluded that muscle necrosis can be caused by Vibrio harveyi and it is linked to thick algal bloom, low dissolved oxygen, low alkalinity and stress.” The ShrimpVet lab carried out histological analyses where researchers examined the necrotic muscle and found many Vibrios They could isolate the Vibrio from the necrotic muscle, conduct the infection and easily replicate the disease in the laboratory. To manage muscle necrosis, there is a need for more sanitation, more water exchange, better algae control and improvement in shrimp health in general. “You can apply disinfectants such as iodine to reduce the pressure of a Vibrio attack on the shrimp,” advised Loc Tran.
Subsequent challenge studies using both immersion and injection of Vibrio harveyi could induce identical lesions as of field specimens. |
Compiled by Zuridah Merican and published in the print copy of Aqua Culture Asia Pacific, January/February 2021.
