Strong farmed shrimp supply means a positive outlook for revenue for US importers in 2018, but also margin pressure, said Bryan Rosenberg, the CEO of Tri-Union Frozen Foods, which trades as Chicken of the Sea Frozen Foods (COSFF).
Along with thin margins on shrimp, Rosenberg, who sold his stake in US importer COSFF to Thai Union Group in October 2016, but stayed on as top executive, anticipates “headwinds” on blue swimming crab, snow crab and lobster. Shrimp makes up over 50% of COSFF’s business, with blue swimming crab; snow crab; lobster; finfish, and scallops making up the bulk of the rest.
“I’m optimistic about the relative value of the shrimp category this year. The supply forecast looks strong, and that generally leads to more consumption and opportunities. But I am not as optimistic about importer margins, which are under pressure,” he told Undercurrent News.
“When you have an oversupply condition, everyone in the middle of the supply chain is under pressure. The shrimp market is so fragmented--there are so many people in it and offering it,” he said.
A rosy shrimp supply picture was presented during the Global Seafood Market Conference (GSMC) in Miami, Florida, organized by the US National Fisheries Institute.
Strong growth from India, a recovery in China and increased production from other Asian and Latin American countries will drive global shrimp production past 3.5 million metric tons in 2018, according to the shrimp panel at the GSMC.
The panel is more bearish than the production level presented during the 2017 Global Outlook for Aquaculture Leadership (GOAL) in Dublin, Ireland, however. During GOAL, a level of close to 4.5m metric tons was presented for that year.
India -- which supplied 213,956t of shrimp to the US in 2017, worth $2.17 billion -- is forecasted to grow dramatically in the coming years, according to the GSMC panel.
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