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Photo: VASEP/FIS
Raw Shrimp Shortages Drive Rising Prices, Expected to Persist
VIET NAM
Wednesday, December 04, 2024, 06:00 (GMT + 9)
Since mid-August, shrimp prices in the Mekong Delta have risen sharply due to reduced supply, fewer farmers cultivating shrimp, and disease outbreaks.
.jpg) According to Ms. Kim Thu, Shrimp Market Expert at the Vietnam Association of Seafood Exporters and Producers (VASEP), the trend of rising prices is expected to continue after notable increases in the early months of Q4.
Shrimp Farming Challenges and Rising Demand
Shrimp farming output has decreased, driven by adverse weather and high farming input costs. Global production of raw shrimp has also faced setbacks, further tightening supply and increasing demand for Vietnamese shrimp in international markets.
- Supply Decline: Raw shrimp supply has dropped significantly in 2024, with a shorter harvest season compared to the previous year.
- Factory Inventory: Processing plants report lower inventories due to high export demand and limited raw material supply. To meet orders, large factories have raised purchasing prices.
- Shrimp Size Trends: Prices for small-sized shrimp (50 count/kg) have surged, reaching VND155,000 ($6.10)/kg in mid-November – a 30% increase since week 35. This marks the first time prices for 50 count shrimp exceeded $6/kg since late 2021.
Black Tiger Shrimp Market Trends
Prices for black tiger shrimp across all sizes have risen since early October.
- Larger Shrimp Scarcity: Supplies of large-sized shrimp (20-30 count) remain limited, driving higher prices.
- Focus on Smaller Sizes: Traders shifted to 40-50 count shrimp, leading to a 4% price increase for 40 count and smaller increments for other sizes.
- Processing Activity: Factory procurement of black tiger shrimp declined in October due to supply shortages.
Export Performance
Vietnam’s shrimp exports showed strong growth in October:
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Whiteleg Shrimp: Exports rose 30% year-on-year to 35,350 tons. Major markets, including the US, Japan, China, the EU, South Korea, and the UK, saw substantial growth. The US remains the top market, accounting for 21% of Vietnam’s whiteleg shrimp exports. Average export prices increased by 1% to $8.32/kg.
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Black Tiger Shrimp: Exports increased by 4% year-on-year to 3,591 tons. Growth was driven by demand in Japan (48%), South Korea (59%), and the UK (39%). However, exports to the US declined by 4%. Average export prices rose by 3% to $11.64/kg.
Future Outlook and Challenges
Raw shrimp shortages are expected to persist until the end of Q1 2025, creating challenges for processing companies that face high input costs while competing with cheaper shrimp from other producing countries. This dynamic pressures business profitability and production efficiency.
Producers and exporters hope for improved weather in 2025, which would stabilize shrimp farming and increase raw shrimp supply. However, competitive pressures, especially from countries like India shifting to black tiger shrimp farming, may challenge Vietnam's market share in the global seafood industry.
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