The recent drop in Ecuadorian shrimp farmgate prices continued again last week as sources previously predicted, with prices falling by between $0.10 and $0.40 per kilogram depending on sizes relative to the previous week's levels.
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Thus, the further decline in prices expected as of mid-November finally took place a bit earlier on Nov. 11 and continued as of Nov. 16, as sources explained to Undercurrent News.
"This new fall has come sooner than we thought, and it has been quite sharp," a small Ecuadorian shrimp producer, who spoke in condition of anonymity, told Undercurrent.
"The sector has had no breathing space to assimilate this. Prices have fallen by over $1.00/kg for larger sizes in less than three weeks," he added. "This is mainly due to more stringent restrictions from China and new lockdowns and tough social restrictions in the European countries in their effort to ease the second wave of COVID-19 infections."
As of Nov. 16, average farmgate prices for head-on, shell-on (HOSO) Ecuadorian shrimp were $4.50/kg for 20/30 count shrimp; $3.50/kg for 30/40 count; $3.40/kg for 40/50; $3.20/kg for 50/60; $2.90/kg for 60/70; $2.70/kg for 70-80; $2.50 for 80-100; $2.30/kg for 100/120 counts; and $1.90 for 120/140 count shrimp.
Depending on sizes, this equates to a decrease of $0.10/kg to $0.20/kg for HOSO shrimp compared to the levels seen on Nov. 11, as the chart below shows.
This trend can also be seen in the import average prices of this product from the EU, which show a continuous drop from week 43 to €4.60/kg ($5.46) in week 45, according to the data from the European Market Observatory for Fisheries and Aquaculture Products, EUMOFA, available in Undercurrent's trade flows data page.
As week 45 data includes up to Nov. 8, a further drop is expected in the next updates.
Undercurrent previously reported that the current situation is not set to get any better in the coming month as new lockdowns are looming around the world and shrimp usually reaches its lowest price level by the end of the year.
"That added to the current situation due to the pandemic, it is most likely that the sector will experience more critical and much more difficult moments than it did in previous years," a second small Ecuadorian shrimp producer also explained.
The forecast for the end of 2020 is that despite the sector's efforts to generate higher sales volume during the year, "this will not be reflected in the total turnover", another industry source previously said.
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Also, the European Commission will in 2021 increase the annual shrimp import quota by 20% from 40,000 to 48,000 metric tons for processing under its new regulation regarding the autonomous tariff quotas, Undercurrent also reported.
Thus, this will benefit countries with no trade agreements with the EU, taking advantage of a new set of duty-free tariffs.
"This is a new challenge for the industry since these countries will now enter into direct competition with us," another small Ecuadorian shrimp producer explained to Undercurrent.
"The big difference here is that Ecuador does have an agreement with the EU for which we have had to work very hard to achieve, trying to comply with very rigorous health, political, and social requirements, among others," he said.
According to Ecuador's national chamber of aquaculture, known by its Spanish abbreviation, CNA, this could mean a loss of around $44.4 million in revenue to Ecuador's shrimp sector each year.
November 19, 2020 at 01:17AM
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As predicted, Ecuadorian shrimp prices continue to fall - Undercurrent News
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