Ecuadorian shrimp prices to China under pressure from weaker yuan, competition

QINGDAO, China -- Ecuadorian shrimp prices have recently come under pressure from the weakening of the Chinese currency against the US dollar and competition from other sources, executives at the Chinese Fisheries & Seafood Expo told Undercurrent News.

But, strong demand ahead of the Chinese New Year is partially supporting prices, sources also said.

In October, the yuan has touched a six-year record low against the dollar. Chinese buyers expect to see the yuan volatility reflected in the prices of shrimp and other species bought from Latin American producers, several industry sources at the Chinese seafood expo told Undercurrent. 

Earlier this year, Ecuadorian shrimp prices increased, because of stronger Chinese demand, which is likely to remain strong. 

Demand is expected to remain strong until Chinese buyers can make orders for the Chinese New Year, which this year takes place a month earlier than usual on Saturday Jan. 28.

Delivering a cargo to China ahead of the Chinese New Year from Ecuador takes approximately 40-50 days, which means orders need to be placed well in advance. 

Size 30-40 per kilogram count, head-on, shell on (HOSO) Ecuadorian shrimp are currently priced around $9-9.50/kg, 40-50 are priced $7.50-7.70/kg, 50-60 at $7.50-7.70/kg, 50-60 $7-7.30/kg, 60-70 $6.70-6.80/kg and 70-80 around $6.40/kg, sources said.

But, Chinese buyers are asking for cheaper prices, pointing to the yuan volatility and availability of cheaper shrimp from other markets such as India or Indonesia, several Latin American firms that sell to the Chinese market said.

"Chinese buyers say the market is slow and they aren't making any money," a source from a large Ecuadorian firm said.

Chinese buyers are asking for HOSO sellers to drop 30-40 below $9/kg to $8.80/kg and under, several Ecuadorian sources said.

The current price for Indian 30-40 count shrimp is $7.50/kg, which is still lower than Thai, Vietnamese, Indonesian and Ecuadorian shrimp of the same type and size, although Indian quality is generally lower, sources told Undercurrent.

Indian shrimp prices have increased year-on-year, because of lower availability of raw material in the country following some flooding at the end of last year. Prices in India could further rise in coming months, according to sources.

Thai production has partially recovered, after a sharp drop in recent years, sources said.

Market development

Ecuadorian shrimp sales to overseas markets have hit new records this year, driven by exports to Asia.

As a result of this, several Ecuadorian packers have increased or are in process of increasing their processing capacity this year, such as Omarsa.

An increase in shrimp production in Ecuador has been absorbed by higher Chinese and partially South Korean demand. But, Ecuadorian exports can’t keep growing if the Chinese market does not grow, a source from one of the largest Ecuadorian processors said.