Stable coldwater shrimp market ahead as global volumes even out

In the Barents Sea, however, landings increased significantly this year due to a lower quota of cod and haddock.

The outlook for coldwater shrimp markets is stable for 2018 and 2019, according to industry insiders talking to IntraFish following the the International Coldwater Prawn Forum meeting held in London earlier this month. 

Fishing in the Barents Sea is back to levels of 10 years ago, with Norwegian vessels increasing harvests of shrimp as a result of a fall in cod and haddock quotas, while other fisheries remain stable, somewhat offsetting lower volumes from Canadian fisheries.
Shrimp landings in the Barents Sea are expected to reach a total 45,000 metric tons this year combining all fleets, Tom Harry Klausen, CEO of Stella Polaris, told IntraFish.
Pull determines push
Norwegian fishing giant Hafvisk, owned by Leroy Group, increased catches of coldwater shrimp in the Barents Sea from 165 metric tons in the third quarter of 2017 to 2,703 metric tons in this year's third quarter, as it shifted efforts to shrimp harvests.
“We’ve had reasonable shrimp prices and good demand, but a somewhat slower market at the end of the catching season as producers have had opportunity to build the stock they need for production in the months ahead,” Havfisk CEO Webjorn Barstad told IntraFish.

Scientific advice for shrimp catches in the Barents Sea are still above catch levels, with the fishery mainly dependent on markets, rather than quotas.
“If prices fall and this is not offset by higher catch rates, then the trawler fleet in general will abstain from fishing shrimp, and focus more on the saithe fisheries for example,” Barstad said.

“Generally, I would say the outlook in the shrimp sector is OK.”
The main challenge with shrimp continues to be the lack of stability in market prices, and to some extent in supplies from region to region, he said.
“I think all parts of the industry would benefit from more stability from year to year, as this would generate a more favorable environment for investments in the shrimp sector."

Norway volumes back to a decade ago
This year there are around 20 active Norwegian boats operating in the Barents Sea, with expectations to catch a total 23,000 metric tons.
“Norway is back to levels of over 20,000 metric tons for the peeling plants: these are normal volumes of 10 years ago,” Tor-Edgar Ripman, marketing manager at Rafisklaget, told IntraFish.

Icelandic, Russian and Greenlandic vessels also operate in the Barents. The increase in volume could prompt a slight decrease in prices towards Spring, but the industry is expected to absorb most of this reduction in raw material price to make up for the 30 percent rise in raw material prices in 2018, Klausen said.
“The industry needs an increase in margins to be able to renew itself."

...but Canada continues to fall
In Canada, total supply combining the inshore and offshore fleets is expected to end the year at 83,900 metric tons, down 4.4 percent from last year, with no big changes expected for 2019.

Over the past decade, shrimp landings in Canada, both inshore and offshore, have fallen significantly, as the industry experiments with a transition towards more “groundfish friendly” conditions, David Decker, secretary treasurer at the Canadian Fish, Food and Allied Workers (FFAW-Unifor) told IntraFish.

“We saw a collapse of cod stocks in 1992, and now biomass has gone up to over 400,000 metric tons, while shrimp biomass is falling due to environmental conditions,” he said.
This year, volumes landed by the offshore fleet in Canada, which produces shell-on frozen shrimp at sea for markets such as China, Japan and Russia, increased 8.7 percent from the year prior, to around 57,300 metric tons.

Meanwhile, the inshore fleet, which processes cooked and peeled shrimp destined mainly for the United Kingdom, and is divided into three main areas – the Northern fishery, the Gulf of St. Lawrence and the Scotian Shelf – saw a decrease of 24.2 percent, to 26,600 metric tons.

“We could see a small decline in inshore landings in 2019 and stable volumes in offshore, but I don’t see any dramatic change in the market,” Decker said.

Time for more double frozen?
In general, industry insiders from the main fishing areas do not see any big changes coming in 2019 in terms of prices, supply or demand, with changes in Norway having very little impact on the big picture.

“At the moment there seems to be a fairly good balance between supply and demand in the market for finished product. We do not to see any noticeable changes in the market price this winter/spring,” Stella Polaris’ Klausen told IntraFish.
In the United States, estimated landings in 2018 are expected to reach 21,000 metric tons in 2018, up from the 16,500 metric tons landed in 2017.

Catches in Iceland are expected to reach 5,000 metric tons in 2018, slightly up from 2017 and with no expected changes in 2019, while in West Greenland, the quota for 2018 was 101,500 metric tons, with no changes expected for 2019.
Despite the small changes expected in the short and medium term in global supply, the industry is seeing some changes in terms of demand of double frozen products, since customers are struggling more and more to find single-frozen shrimp, Klausen pointed out.

“It will be interesting to see if the Canadian industry start producing more double frozen," he said.

In addition, there are some changes in market trends in the cooked shell-on market, with the Russian fleet shifting gears to shell-on production for domestic supply, leaving less room for Greenlandic supply of the product in the country. However, there are no major changes in demand for this product from China and Russia, executives said.

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