The Ecuadorian shrimp sector might be already investing in market diversification to maintain export levels, CP Foods' Robins McIntosh told Undercurrent News on the recent 'Global Shrimp Market Outlook' webinar.
"I believe investments in diversification will be starting to take place soon," he explained to Undercurrent. "There may be some of them happening now, but they [Ecuadorian shrimp producers and processors] are certainly putting into plans to create markets away from just one major buyer [China]."
According to him, Ecuador could in the future better balance its shrimp exports among Europe, the US and China, as had historically done.
"Several sources in the sector told me they are looking to cut down exports to China to between 40% and 45% of the total," McIntosh also said. "The country plans to send shrimp more consistently to the US and Europe after putting so much emphasis on just one market that has been offering them such low prices."
As Undercurrent previously reported, China is the leading importer of Ecuadorian shrimp, accounting for between 62% and 65% of the Latin American country's total export volume.
However, the pandemic has increased a general feeling of uncertainty about the future of the shrimp sector, which has caused many small producers and packers from the Latin American country to think twice about exporting their products to China.
"We must continue exploring new markets and position ourselves as leaders in the US and the EU," an Ecuadorian small shrimp producer told Undercurrent previously. "Moreover, value-added products are the future and we should start focusing on them significantly more, also competing with other countries for this segment."
China optimistic about imports from Ecuador
Over the years, Ecuadorian shrimp products have laid out a rock-solid foundation within the Asian giant shrimp market, which would be the reason why China doesn't see any significant changes in the general supply situation in the future, Beiyang Jiamei Seafood CEO Peng Song told Undercurrent during the webinar.
"Some imports switched to Peru or Saudi Arabia since we also had to find shrimp markets apart from Ecuador due to COVID-19," Song said.
"However, if there are no force majeure reasons, I trust that demand [from China] would be only increasing in the long run for vannamei shrimp from Ecuador."
However, this growth in consumption will depend a lot on the sector, since there is still some reluctance to consume Ecuadorian shrimp products within Chinese households, he added.
"I believe Chinese importers will be placing orders for 40, 50 count shrimp, mainly sold through the HORECA [foodservice] channels and which are moving faster than we expected," Song said. "However, the big challenge here is within the retail sector, as it will take some time until people regain confidence in consuming vannamei shrimp from Ecuador."
After months of low import levels of Ecuadorian shrimp, larger volumes of this product are expected to be absorbed by the Asian country in the coming months as part of the preparations for the Chinese New Year, Song said.
Moreover, the bulk of pre-holiday sales usually takes place during the last quarter of the year.
September 18, 2020 at 12:31AM
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Ecuador shrimp sector investing in market diversification - Undercurrent News
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