Market Blog Archives - Siam Canadian

Vietnam Shrimp Market Update: Navigating Through Challenges: Jan 23, 2024

siam — Tue, 23 Jan 2024 07:53:16 +0000

The Current State of Vietnam’s Shrimp Industry

The Vietnamese shrimp industry is currently confronting several significant challenges that are expected to persist until at least mid-2024. Key factors affecting the market include reductions in seafood export targets, declines in shrimp export turnover, and complex global market dynamics.

Adjustments in Export Targets and Turnover

The Ministry of Agriculture and Rural Development has revised its 2024 seafood export target to $9.5 billion, a reduction from the 2023 target of $10 billion. This decision reflects numerous challenges, including warnings from the European Commission, uncertain recovery in import demand, strong competition, high inventories, and inflationary pressures.

As of November 2023, Vietnam’s seafood export turnover was projected to be $8.27 billion, marking a 19% year-over-year decrease. Shrimp exports, in particular, have seen a 22% decline in the same period, primarily due to a global surplus and reduced selling prices.

US Market as a Beacon of Hope

Despite the challenges, the US market offers a ray of hope. In 2021, Vietnam’s shrimp exports to the US surpassed $1 billion for the first time, suggesting potential growth in this market.

Internal and Global Challenges

The Vietnamese shrimp sector is battling internal issues like disease outbreaks, high mortality rates, and rising feed costs, resulting in increased shrimp prices. Moreover, the global shrimp market is facing oversupply issues and weakened demand, adding further pressure.

Looking Forward: Strategies for Recovery

In response to these challenges, Vietnam is focusing on sustainable seafood economics, competitiveness enhancement, and export strengthening. There is also a push towards deep processing and innovation in shrimp products to boost market competitiveness and profitability.

In Conclusion

The Vietnamese shrimp industry is navigating through a complex period marked by both internal and external challenges. However, with strategic adaptations and a focus on key markets like the US, there is potential for recovery and growth in the coming years.

Vietnam Shrimp Market Update: Dec 24, 2021

siam — Fri, 24 Dec 2021 08:40:00 +0000

This week, shrimp raw material prices in Vietnam rose further while prices have remained stable in most other producing countries. Frozen seafood exporters advised prices of smaller sizes of Pacific white shrimp in Vietnam continued to rise, as supplies of small sizes are tight while demand from market is very strong. Most farmers prefer to raise shrimp to bigger sizes for better margins rather an harvesting early. This year, demand of size 31/40is particularly strong with virtually all Vietnam seafood processors having many pending orders for this size.

Prices from shrimp suppliers for vannamei HOSO 100/kg-count rose from $4.33/kg to $4.37/kg and price for 60-count rose from $5.42/kg to $5.51/kg. Prices for 30-count stayed at $7.25/kg. Prices for larger sizes is steady.

At the same time, the price increase of smaller sizes may be attributable to higher demand for the smaller sizes of shrimp targeted by exporters for the Chinese frozen seafood market. Demand of large shrimp from exporters for upcoming holidays in the EU and US market are slowing down as the majority of holiday orders have been shipped. The current demand is shifting to China and other Asian markets.

From black tiger shrimp suppliers, prices remained largely stable over the past four weeks. Price for HOSO 20/kg-count stayed at $11.36/kg, price for 30-count held at $9.18/kg and 40-count were at $7.87/kg.

Due to Covid, processing capacity of seafood factories is up and down like a daily tide. There are more more infections recorded in all provinces. The government is still trying to enact the best possible measures to control pandemic while recovering production activities and rescue the exhausted economy. Many processors can only run their factory at 20% to 30% of normal capacity.

Thailand Shrimp Market, Freight & Covid Update: Nov 29, 2021

siam — Mon, 29 Nov 2021 08:43:00 +0000

OCEAN FREIGHT

We were informed from many sources that freight situation is getting better in terms of availability and pricing. Unfortunately, we do not experience that in Thailand. The space is still very limited and price is still so high. Thailand seafood industry and exporter are still suffering from high freight cost.

The cost to LA and NY is still as previous period (to LA is around $17,000 – $20,000, to NY is around $20,000-$25,000). The cancelation is still the problems for all exporters even the booking confirmation is already advised – the chance of cancelation is still possible. There is no sign of improvement from our view.

We have learned that there are around 100 ships waiting to enter and unload at LA. The truck and train are very shortage to move the containers. The new regulation that implemented November 1st stated that arriving containers that planned to move by truck will be allowed to stay 9 days and containers that planned to move by train will be allowed to stay for 3 days, after that the charged of 100 USD/container will be applied and increasing $100 USD per container per day. The exporter who plan to ship the containers to LA need to have a really good plan to avoid the additional cost. The East coast port – Savannah also has the problem. There are around 25 ships have waited outside the harbor.

RAW MATERIAL / FARMS & HARVEST

Shrimp Raw material price in Thailand is very high at the moment. This year price is significantly higher than last year. From our reservation, the price of Nov2021 is higher than Nov 2020 around 10%.

Regarding the shrimp availability, one of our key sources has advised that they are now receiving raw material for the production lower than usual period around 30-40%. And the big size shrimp like HOSO 40 pcs/kg and bigger is very limited. The regular size like HOSO 50 pcs/kg and smaller seems to be available but in a small quantity. Most of the packers are now trying to finish their pending order and catching up the delayed ones. The availability shipment now is from February 2022 onward.

The less production could be a result of low harvest in the previous period when economics situation was uncertainty, bad weather and flooding. Optimistically, the 2021 annual production should be at the same level as 2020. The shrimp supplier has advised that their production cost such as feed and utility is also increasing.

The resume of business activity after country has opened again is considered as a driving factor to drive food industry. All restaurants and hotels are fully open which push the demand for food and seafood higher than the other quarters. On the other hand, the seafood suppliers are still not 100% recover because all the factories and suppliers need to implement high preventive procedure such as social distancing and capacity reduction to prevent the spread of Covid 19. The vision for 2022 is still unclear but most of the expertise believe the situation will be better by Q2 when the number of vaccinated people is more than 80%.

Thailand General Market Update – Freight, Raw Material, Covid: Oct 5, 2021

siam — Tue, 05 Oct 2021 05:50:28 +0000

OCEAN FREIGHT

The freight rate is still strong and it very difficult to get any space confirmation. Some liners do not offer the service to some ports like Chicago, Houston, San Francisco or Jacksonville. There is only available freight service to main port only. The quoted price to LA is somewhere between 13,000-21,000 USD and around 13,000 – 18,000 USD to NY. However, very difficult to get the space for this price. Exporters need to pay a big premium for the space. Some are paying USD 25,000 and higher to get guaranteed space. The service is only for CY mode. The competition for vessel space among the exporters is very tough since demand is going up for festive season shipment. And also congestion at the destination like LA is making the price goes up. The latest information we had is there are more than 50 ships are piling up at the California gateways of Los Angeles and Long Beach. The situation might slightly relieve when all the shipment for Christmas and New Year has finished but the price will not go down to the last year level. I believe the new standard price is going to be set up in some point. And all exporters need to reconsider their cost structure. In our view, the price will hang in this level until summer 2022.

RAW MATERIAL / FARMS & HARVEST

The price of shrimp raw material all size range has moved up. The small size like HOSO 100 pcs/kg (CPTO 71/90) has significantly moved up from last week. I think the price for this size should go up in the next period of time because most of the suppliers are willing to finish their load for CPTO 71/90 – however it depends on freight situation as well. I have heard that some suppliers are now slow their production because of their cold storage is getting full. If the suppliers cannot ship the container out, they might not able to produce more. The other shrimp size that the price significantly moved up is HOSO 70 pcs/kg. One reason should be supply of the big size is slow down. As Thailand is being hit by several monsoon storms in the past few weeks and expect to have another 2-3 more to come. The shrimp farmer would not risk their crop to get damaged by heavy rain, they have to catch the shrimps they have to prevent the loss. White feces is still a problem for the shrimp farmer. Some part of Thailand is already affected by flood and heavy rain. We have been warned by the authority that there is a high chance of flooding all area in Thailand. We will see better view in the next few days how bad it could be. Someone said, it could be as bad as 2011.

COVID-19 IMPACT

The official number of Covid infected is now around 10,000 cases a day. So all the Covid measurement slightly relieve. The number of places are resume to open normally by Oct 1^st such as cinema, fitness, park. If the number of vaccinated people significantly increases and the government, feel the situation is under control. The full open town (some provinces such as Bangkok, Chiangmai,) is being considered by the government. The date likely to be Nov 1^st . However the full measurement is still being applied at the seafood factory to prevent the cluster. All the seafood factory are still reduce their capacity by reducing worker density, apply “bubble and sealed policy” – which means all workers can travel only their house (or dedicated resident) and factory and also still not allow any guests visit. There is no report of new cluster in any seafood factory for a while but all the factory do not want to take any risk of closing the production line.

China General Market Update – Freight, Shrimp Raw Material, Covid: Oct 01, 2021

siam — Fri, 01 Oct 2021 04:11:18 +0000

OCEAN FREIGHT

Suppliers are finding that depending on different port, the freight from China to LA and New York is not same, from Zhanjiang to LA, the ocean freight for frozen seafood is USD 15000 and Zhanjiang to New York, that is USD 17000. But some ports like Dalian are seeing much higher freight for frozen seafood to New York, like USD 22,000.

Even if exporters pay the ocean freight that shipping line charges, in real practice, it is still difficult to book the container. Some shipping lines request shipper to book the container 21-28 days prior to ETD. The current congestion in major US port impacts the empty container return back to China. I heard that 60 vessels are waiting in the sea around LA to dock in LA port, 60 vessels means 600,000 containers, if you consider similar issue in other ports in USA say New york, Savanah, Houston. This problem might not be solved in a couple of months, so the current shipping mess might continue for a couple of months.

At this moment, the shipping lines are concentrating on the main port such as LA and New York, for inland destination, they normally do not commit it, they will ship to the LA, the consignee has to figure a way to ship to inland city themselves.

RAW MATERIAL / FARMS & HARVEST

In China market, the major shrimp sizes are as follows: HLSO

Shrimp Size	Prices in the first half	Current price
31/40	RMB 50/KG	RMB 56/KG
41/50	RMB 48/KG	RM 53/KG
51/60	RMB 45/KG	RMB 50/KG

As China imposed a lot of restriction on imported Ecuadorian and Indian shrimp, so the supply from these sources is dwindling, therefore, the China domestic shrimp raw material price is going up and this trend should continue until Feb 2022.

Shrimp farming in China has no major improvement, as imported shrimp is cheaper, so the farmers have no incentive to expand farming, meantime, we see the farming area going down. As for the disease / climate, that is similar to last year, no major issue.

COVID-19 IMPACT

China basically brought Covid-19 under control, even there is isolated covid-19 spike, but in general, it is normal, there is some disruption but not that serious.
The labor short is exacerbating in China, more or more workers goes to delivery service industry and not willing to work in a factory, so the workers are generally in short supply and this is affecting frozen seafood exporters. Apparently 8 million workers are employed in delivery service in China. This number will keep going up and will suck more workers from the factories of seafood suppliers

In order to reduce the CO2 emission, the local authority start to reduce the electricity supply to outdated industry, seafood processing is one of them. In some areas, the factories are allowed to produce 4 days per week ( we call 4 on, 3 days off ). Some people anticipate this will deal a blow to the China supply to the global supply. Such electricity supply restriction was imposed just last week, the impact of this can only be assessed a couple of months later.

Global Freight Update: Sep 27, 2021

siam — Mon, 27 Sep 2021 15:33:32 +0000

Freight costs have significantly increased since middle of 2020 and in 2021 moved up sharply. Prices have more than tripled in some cases, compared to last year, as you can see from the graph below.

source : https://www.statista.com/statistics/1250636/global-container-freight-index/

Industry experts are saying there are 5 reasons why the price is in the high level.

Since Covid started to impact everything in early 2020, it also created problems of imbalance in production and demand for products. Countries locked down and opened in different periods create unstable and unpredictable supply. Many industries such as seafood, fruit and vegetable, and other perishable products were damaged from the lock down. Shipping companies cut capacity and there was a shortage of empty containers are making the supply side getting worse. On the other hand, when the situation recovered, the global demand returned especially for consumer products and general international trade. Therefore, the ocean freight capacity became tight as the economies opened up further and businesses started to build up inventory.

source : https://think.ing.com/articles/the-rise-and-rise-of-global-shipping-costs#a1

The alternative of ocean freight is very limited which means it’s difficult to avoid surging transport costs. For some items such as high value products, it’s possible to ship by air, train or even truck. However, suppliers of commodity products, seafood and other food products have fewer choices since the value of the products is not high. Sometime, the exporters (or importers) need to pay premium rate for vessel space to avoid the inventory shortage.
Ocean freight capacity is not expanding while the export volumes from some countries is going up. Some countries are already exporting more goods than they did before Covid. International trade seems to rise further not only from major trading countries but also their partners. The online shopping is one of the reason of the booming. There are new exporters emerging every day. Goods are sent from across the world easier than before when the customers can explore the items worldwide with more choices of supplier.
Many major shipping routes have recovered but blank sailing (cancelled port calls) have reduced capacity by around 10%. Shipping company are trying to reduce blank sailing. In this quarter, it might reduce by 4% which still leaves a big deficit.
Port congestion is another big problem which causes delays and cancelations. Shipping performance in 2021 has carried on where 2020 left off, in terms of lower numbers of vessels keeping to schedule, and average delays for late vessels rising.

source : https://think.ing.com/articles/the-rise-and-rise-of-global-shipping-costs#a1

There is no sign of recovery in the short period of time. Some sources have advised the situation could be last as long as summer 2022. Most of the liners are running with almost 100% capacity therefore if there are small problems such as accidents and mishaps, it can have a massive effect. The recent report shows that there are around 65 ships are piling up at the Californian gateways of Los Angeles and Long Beach. It is a significant sign since the California ports are responsible for almost half of all US imports. If all the situations couldn’t be resolved, there is a chance of transportation price between the US and Asia could jump up more than 500% from this time last year. The worst thing is there is someone need to pay for this. If the company is big enough and already make a good margin on their items, they might take some pain. But if the company is small and the product make a thin margin, it most likely the transportation cost will push to the customer so the product price will rise – which we already seen some company already raise their price to offset the transportation costs.

Thailand Shrimp Market Update: Sep 17, 2021

siam — Fri, 17 Sep 2021 15:30:58 +0000

Raw material Price, Volume, Majority Size available

Last week, the raw material price went up from August. However, this week the price came back to the same level as August. Surprisingly, the price hasn’t gone up as the shrimp season has almost finished and there shouldn’t be the small shrimp size that much. One reason should be the heavy raining in the past few months. Thailand has faced the heavy rain in some region and It has been raining on and off for this two months and also the new rainy storm is about to approach Thailand. The farmers are scared of the loss from the rain. Moreover, the white feces syndrome is still the big problem for the farmers. The farmers usually prevent the big loss by selling what they have. We don’t see the big volume of big size shrimp i.e. Head on 20-25 pcs/kg or head on 30-32 pcs/kg (for EZP 8/12, 13/15) or head on 37-38 pcs/kg (for CPTO 26/30), the majority size is medium like head on 50-70 pcs/kg (CPTO31/40 -41/50). Considering from last year trend, price will slightly move up and down until mid October and will go up from mid October until the end of the year. Currently, most of the packers and shrimp exporter start to offer the December shipment on ward.

Farming condition, farmers info

The farmers are complaining about the low shrimp prices and trying to petition the government. However, the farmers are expecting the higher price since the domestic demand is coming. The restaurants resume for dine in but limit the capacity to only 50-70%. Over the weekend, there is a long waiting queue for some restaurant. And lots of seafood restaurants are running huge promotion. If the demand of shrimp and seafood from domestic consumption increases, it will encourage the farmers to harvest more. However, normally, at the end of the year farmers usually reduce the density. Our sources told us that the raw material price of shrimp feed such as soybean, fish meal has increased but the shrimp feed supplier cannot increase the price. If the feed price increases, it will have a huge impact on the farmers, processer and exporter as Thai shrimp price is higher than other origin. All in all, there is a sign of shortage of shrimp by end of this year to early next year.

Packers situation

Packer still buy raw material as normal. However, the freight situation has affected them a lot. Some packer will not start production if they cannot confirm the vessel space because of limitation of their cold storage. Most of packers are still in a good condition even they cannot increase capacity but they are still able to produce as normal. They can manage the Covid measurement already. If there is no big cluster happened in the area of seafood producer, the factories will manage it thru the situation. The other problem is the packaging. The packaging supplier has extended the lead time and there is a sign of price increasing in the near future which will affect the whole seafood industry not only shrimp industry.

Challenge

The real challenge is freight cost and vessel space. It’s difficult to get the space confirmation from shipping line. Shipping lines only offer main port like LA, NY, Norfolk, Chesapeake to the exporter and the price keeps going up. There is no significant sign of this crazy situation to stop or improve. Only expert’s opinion is price is going up and no one knows when will it ends. This situation is out of exporter or anyone control and this could damage not only seafood business but all export business. It is certainly that Covid, port congestion and high demand are the reason of this chaos but there might be someone try to manipulate the situation as well.

Ecuador Shrimp Market Update: Sep 14, 2021

siam — Tue, 14 Sep 2021 15:28:05 +0000

Shrimp purchases remain active in all international seafood markets. There is an increase in domestic shrimp prices in Ecuador that is forcing exporters to quote higher prices to importers in the United States and Europe. This increase from exporters is due to an exaggerated demand from Chinese frozen seafood importers, who today are beginning to worry about purchases for their New Year (February 1, 2022). It is correct to say that today the purchase price of the shrimp is the result of the sale price to China and not the average sale price of Ecuador to other markets in the world.

In the last two aguajes (harvest), the domestic purchase price rose by approximately 60 cents per kilo in the main sizes in China, which has the consequence that HOSO & HLSO sales to other markets feel somewhat slowed down by said increase, but demand it is maintained and importers will have to pay the current price if they want to buy volume, according to various suppliers.

In general terms, there is very good shrimp demand, although not everyone is happy with paying the higher prices, but they will have to do it to have product for the Christmas and New Year’s holidays.

Vietnam Pangasius Market: Dec 17, 2020

siam — Wed, 16 Dec 2020 18:45:00 +0000

Input raw material

According to raw material suppliers, by end of Sept 2020, the pangasius farming area in the Meking Delta is 4,968 hectares, equal to 91% compared with same period in 2020
Total production of pangasius in first 9 months of 2020 is about 1 million MT
Seafood suppliers advise that pangasius seed size 30~35 pcs/kg price was at 27,000 VND/kg

Raw material Price

Farming cost: average is 23,000 VND/kg
First 9 months: Raw material price at 17,000 VND ~ 19,000 VND/kg, much lower than farming cost. Farmers suffered losses and stopped farming or changes to farm other kinds of fish
Since Sept, price has risen to 25,000 VND/kg
In 2020, the average raw material price is the during the past 4 years

Export

In first 9 months, exporters have seen the export value of pangasius exports decrease by 30% over the same period of last year
Seafood exporters saw the total export value of pangasius reach USD 1.04 billion, down 28.6%
Among the main frozen seafood export products, only shrimp had a good export growth. Export turnover of shrimp accounted for 45% export value of VN seafood while pangasius continuously decreased , accounting for only 17.3%, down from 23% of last year
The price of pangasius also low, also affected the export turnover of pangasius.

Pangasius International Markets

By the end of Sept, Vietnam exported pangasius to 134 markets around the world
Export value reached to 375.1 Million USD, down 24.8% over the same period last year
China/Hk, US and Asia are still the 3 largest market of pangasius
Sales in top 10 pangasius market decreased : China& HK decreased 16.8%, Asian decreased 30.3%, EU decreased by 33.8%. Mexico decreased by 56.3%, Brazil decreased by 31.4%, Colombia decreased by 44.7%, The USA down by 16.8% and other markets decreased by 40.3%. However, the UK market increased by 26.9%.

Thailand Shrimp Market: Sep 28, 2020

siam — Sun, 27 Sep 2020 18:51:00 +0000

Frozen seafood exporters advise that Thailand shrimp Raw material prices reached bottom over the past few weeks. Prices on 30/40/50 pcs/kg vannamei shrimp are now moving back due to high demand, especially from China but as well from US & Canadian retail orders. Processors and shrimp suppliers are having to pay higher prices to secure raw material.
Medium sizes price is mostly stable at this time. Harvests for current crop will be largely finished by end October. The farmers might not raise the shrimp to larger sizes as weather is quite unpredictable with many storms hitting the country. Will be more medium sizes harvested than large sizes.

As Thailand shrimp prices have dropped shrimp farmers are pressuring government to support prices. They are pushing the government to stabilize shrimp price for the short term and for the longer term instate the pledging scheme that has been delayed. The minister of agriculture has taken the proposal and expected to give reply soon.