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Photo: Revista Puerto/FIS
Argentine Shrimp Faces Challenging Season Amidst Stagnant Markets
ARGENTINA
Tuesday, January 21, 2025, 00:20 (GMT + 9)
The year began with cold storage facilities packed with unsold goods and prices that are equal to or even lower than those of the previous season.
Smaller sizes, in particular, are proving difficult to market, reports Nelson Saldivia for Revista Puerto.
Nearly 80 days into the shrimp fishing season in the waters off Chubut, the industry is voicing concerns over a commercial dynamic that has not met expectations. Although the season might conclude with record catches, this does not translate into economic success, as international demand for Pleoticus gallinari remains subdued, except in certain niche markets, and prices continue to stagnate or decline.
Large-size shrimp (L1) remains in demand, thanks to its unmatched quality and lack of competition. While L1 and L2 sizes are being sold, smaller sizes like L3 and L4 are harder to place, and buyers offer very low prices. Argentina's fishing industry, unable to set prices, is witnessing stagnant demand in international markets without signs of recovery.
Unmet Expectations
The season began in November with high volumes and excellent quality, which activated the production chain with hopes of a market rebound by year-end. However, this recovery did not materialize, raising alarm across the sector.
Companies report that Chinese buyers have ceased purchasing wild Patagonian shrimp, with this market falling entirely off the radar. Overall, interest in Pleoticus muelleri products remains minimal.
Factors Impacting Demand
One of the primary factors contributing to this scenario is the growing production of farmed shrimp (vannamei), which now exceeds 1.2 million tons. Although they are distinct products, both end up on the same shelves, with vannamei offered at significantly lower prices.
This substitution effect is particularly noticeable in L3 and L4 sizes, where vannamei competes directly. Consumers of these sizes prioritize price over quality, leaving the Argentine industry at a disadvantage due to its higher production costs. Many companies are now holding significant stockpiles of L3 and L4 shrimp in cold storage, struggling to sell them profitably.
Limited Impact of Biological Pause
A recent seven-day suspension of operations by the Rawson fleet had little effect. Before the pause, catches were dominated by L3 and L4 sizes, and this trend continued after fishing resumed. With processing plants already overstocked, these smaller sizes are losing value and interest, further pushing prices downward.
A Complex Scenario for the Sector
The shrimp fishing season in Chubut’s waters is unusual—not due to resource scarcity, but because of adverse economic and market conditions. While the final figures might indicate a record in catches, this does not reflect the sector's true challenges.
Competitiveness Undermined by Macroeconomic Factors
Argentina’s fishing industry faces severe competitiveness issues due to high fiscal pressure. Export duties, combined with an increase in the Unified Extraction Tax (DUE) from January 1, have driven up operational costs. Additionally, exporters must pay tariffs to enter European Union markets.
Shrimp ultra-frozen at sea, top quality
Compounding these issues are dollarized production costs and a fixed exchange rate, creating an exceptionally challenging environment for competing in demanding international markets.
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