Shrimp Market Report - May 2009 – EU

 



The European market for shrimp is weak

The European market for shrimp continues to be weak with both demand and prices remaining low. The retail chain segment has reduced its orders significantly and stocks are said to be piling up as a result of consumers
’ lessening purchase power and reluctance to buy comparatively expensive products. Demand is decreasing on all major shrimp import markets. Import annual figures for 2008 indicate that shrimp imports decreased by 7% in Spain, by 2% in France and by 8% in the United Kingdom and by 1% in Germany compared with 2007. In general, demand decreased more particularly for expensive shrimp products, such as processed products, chilled products or value-added products but that was not always the case, depending on the market and on the period, with fairly good end-of-year consumption.




Argentina, Ecuador and China share the lead on the Spanish market

Compared with 2007 figures, 2008 annual Spanish shrimp imports lost 7% in volume and 3% in value. The decline in imports is not consistent across all products but differs according type. In 2008, 94% of total Spanish shrimp imports were warmwater frozen whole products. In this category, the decrease was 6%, while chilled products decreased by 26%, coldwater frozen products by 19%, whereas processed products registered a remarkable 23% increase.




During the last quarter of 2008, when the economic crisis started to have a serious impact on European markets, Spanish shrimp imports remained fairly good with 56 000 tonnes, corresponding to only a 1% decrease in volume on 2007 figures and to an 11% increase in value. In October-December 2008, coldwater frozen whole imports increased by 8% on the Spanish market but decreased noticeably in value and entered the Spanish market at an average unit value of EUR 6.18/kg against EUR 7.48/kg during the same period last year. Warmwater frozen whole products recorded the opposite trend, with an average unit value of EUR 5.33/kg against EUR 4.73/kg in 2007.

Argentina, Ecuador and China shared the majority of shrimp exports to the Spanish market with 17% market shares respectively. Although these three countries today have an equal position on the Spanish market, their historical background is quite different. Argentina registered ups and downs on the Spanish market depending on the availability of Pleoticus muelleri and, in 2008, despite a difficult start, landings were quite good (around 47 000 tonnes). Ecuador constantly increased its market share over the years since 2002 with an average growth rate around 25% a year, and between 2007 and 2008, registered a further 30% increase on the Spanish market. Up to 2004, China was almost absent from the Spanish market and it is only from 2005 onwards that China started to export around 27 000 tonnes a year to Spain.


Strong imports by France notwithstanding the economic crisis

French shrimp imports in 2008 for all categories combined were 2% lower compared to 2007 figures but were nonetheless very good compared with previous years.
In terms of value, imports were stable.


The 2008 decrease in volumes – compared with outstanding results in 2007 - affected all categories. However, while frozen whole imports decreased by only 1%, higher-priced products such as fresh (-6%) and processed ( 8%) products experienced a more drastic drop, which is not surprising in a period of economic slow down. During the last quarter of 2008, with the effect of the economic crisis, the decrease in shrimp demand was more perceptible on the French market and imports decreased by 5% on the previous year figures. However, surprisingly, some shrimp products, and more particularly most expensive products, recorded very good import figures at the end of 2008 (processed products +5%, chilled products +28%), showing that despite difficult times, French consumers did not relinquish costly end-of-year food expenditures.

In 2008, the origin of products imported by France changed somewhat compared to previous years. Ecuador increased the volume of its exports by 23% (20 000 tonnes) and continued to dominate the market. Indeed, out of the total 105 300 tonnes of shrimp imported by France, almost 20% was of Ecuadorian origin. India and Thailand encountered more difficulties in exporting to the USA, thus in 2008 increased their market share in the French market, respectively by 11% and 19%. Consequently, India became the second largest supplier to France in 2008 with a 10% market share of total imports. Madagascar with its high-value products continued to have the favour of French consumers thanks to the certification of its high-quality product but also to a decreased unit value of EUR 8.39/kg against EUR 9.20/kg last year. Brazil saw its exports to France drop drastically by 43% as a result of a production collapse and various economic factors.




Shrimp becomes less affordable to UK consumers

Repercussions of the economic crisis are particularly strong in the UK food sector. The economic recession is driving consumers away from expensive products, including shrimp, and from restaurants where shrimp is mainly consumed. People have changed their habits to adapt to lower purchasing power and consequently fast food outlets, and particularly the traditional fish and chips takeaways, have seen their sales increase significantly. Another striking example of new responses in the UK to address the crisis is the tremendous success, beginning last September, of a shop online selling short-dated and out-of-date food and drink at highly discounted prices; a practice which is legal although questionable. In this context, it is not surprising that demand for shrimp, considered a
“luxury” food item, has decreased substantially recently. Moreover, mainly due to the depreciation of the British Pound, the average unit value for all shrimp categories increased significantly from the end of last year, as well as prices in the retail sector, making shrimp less affordable to many UK consumers. The average unit value for shrimp on the UK market in 2008 was as high as GBP 4.18/kg against GBP 3.72/kg in 2007, while frozen whole coldwater products recorded an even greater increase of 0.85 cents/kg.


UK annual import figures indicate that in 2008 UK total shrimp imports decreased by 8% in volume and by 3% in value. All categories were affected by the drop and in particular, the frozen sector decreased by 9%, the chilled sector by 17% and the prepared and preserved sector by 8%. The proportion of coldwater shrimp imported by UK continued to decrease in 2008. With only 32 700 tonnes imported, the major market for coldwater shrimp in Europe shrank somewhat and lost 11% on 2007 figures and 20% on 2006 figures.

Taking into account imports of the last quarter of 2008 only, in order to observe the impact of the economic crisis, it is interesting to note that UK shrimp imports amounted to 22 800 tonnes, corresponding to an 11% decrease compared to the same period in 2007. However, due to the local currency devaluation, in terms of value UK imports registered a 9% increase on 2007 figures. Actually, with almost 106 million pounds, the value of imports for the last quarter has not been as high during the past five years, with products entering the UK market at an average unit value as much as GBP 4.65/kg (against GBP 3.80/kg last year). This trend is particularly true for prepared and preserved products imports (decreasing by 13% in volume and increasing by 8% in value) and for frozen products imports (decreasing by 9% in volume and increasing by 11% in value) whereas chilled product imports collapsed.



In 2008, Iceland kept its position of largest supplier to the UK (mainly cooked and peeled products) but saw its exports to this country decrease by a further 15% in 2008 compared with the previous year. The second largest shrimp exporter to the UK, Thailand, experienced the opposite trend with regular increases of volumes exported to the UK over the past few years and a 5% increase in 2008 compared to 2007. Thailand, having had difficulties in exporting to the USA, found a niche in Europe and exported 9 800 tonnes to the UK in 2008. The expansion of Thai exports was recorded in the frozen whole sector (+17%), while C&P shrimp from this country decreased by 6%. Denmark also lost market share on the UK market with 9 600 tonnes against more than 10 000 tonnes in 2007. India lost ground with a 26% drop but found a good substitute market for its products in France. By far the biggest increase in volumes sold to UK was recorded by Viet Nam (+65%). Norway increased its market share in the prepared and preserved coldwater shrimp sector thanks to an 18% increase in its total exports to the UK, while Canadian supplies collapsed in this sector ( 33%).


The German shrimp market is rather static

The fact that Germany entered into recession during the third quarter of 2008, and registered a further 2.1% decrease of its GDP in the fourth quarter of 2008, did not have a drastic impact on its shrimp sector. German shrimp imports, which had developed steadily at a strong growth rate during the past few years, settled down in 2008, decreasing only slightly (by 1% in volume and by 4% in value).




As in other European countries, the decrease in shrimp imports is mainly due to a reduction in fresh (-70% of imports, on 2007 figures) and processed (-5%) product demand. Lowered purchasing power and increased uncertainty push consumers towards to less expensive products. Total whole frozen shrimp imports were more or less stable and entered the German market at an average unit value of EUR 5.21/kg against EUR 6.60/kg for C&P products and EUR 9.93/kg for fresh products.

The warmwater shrimp market in Germany was dominated by Asian countries, which in 2008 saw their volumes to this market increase noticeably, with the exception of India, which experienced a 10% decrease. Coldwater shrimp products represented around 30% of total imports with Danish (2 700 tonnes) and Greenlandic (2 300 tonnes) products accounting for half of imports in this category.


Outlook

In nearby all European countries, consumers have changed their habits to adapt to new economic constraints. The trend which includes saving on restaurant visits and on expensive food items is expected to last for some time. All EU countries are predicting more difficult times and worsening economic situation for all of 2009, giving little likelihood that comparatively expensive food items, such as shrimp, will register an increase in demand. The period of Lent (40 days before Easter) is normally a good period for seafood consumption, particularly in Southern Europe where the Christian rituals are more closely observed. However, this year, demand seems to be below expectations. It appears, though, that European consumers are not ready to give up with festive food and that they are ready to pay higher prices occasionally on high quality products, such as wild-caught products or organic products.



By Karine Boisset (GLOBEFISH)
© FAO GLOBEFISH 2009

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