Ecuadorean shrimp farm prices decrease 4.4%; first drop in two months

News 16:37 12/09/2014 496
For the first time in about two months, farm prices on Ecuadorean shrimp have gone down significantly.

Prices for the weekend’s harvest are $0.20 down from the last harvest two weeks ago, a 4.4% drop from last harvest, for 41 per pound count shrimp, sources told Undercurrent News on Monday.

Prices were at $4.30 as of Monday, down from $4.50 last harvest, which was two weeks ago, Crimasa general director Joel Sabando toldUndercurrent News.

Crimasa is a mid-sized processor that buys all but 90 to 95% of its shrimp from farmers, while the rest produced at its own ponds; and it spent the last week and weekend negotiating with farmers.

Sabando said these prices will likely translate into FOB prices of $4.85 to $4.90 per pound for headless shell on (HLSO) shrimp. The impact will come to US wholesalers in about three weeks, after the product is processed and shipped to the United States.

The $0.20 drop is the first sign of market softening in months, other than a drop of $0.65 in late August that was induced by the US imposition of 10 to 13.5% countervailing duties (CVD), said Sabando.The duties have since been nullified, and prices have risen steadily since then and had been rising steadily before then as well.

Prices have risen from a level of $2.50 to $2.60 in February to $4.65 in late summer, which was the highest farm prices Sabando paid.

The cause of the price drop is more ambiguous this time around than it was then, indicating that perhaps the global market is truly softening.

It is not softening as much as processors were anticipating last week, however. As of Friday, Sabando anticipated the price would drop $0.60 from the prior harvest – far more than the $0.20 drop that ultimately became final on Monday, after the weekend harvest.

This puts processors in a better position to sell to US buyers, which two sources at major processors in Ecuador told Undercurrent have not been buying for at least the last three weeks, if not the last month and a half.

The reason US buyers have not been committing on product is because the pipeline in the US – after months of having too little product – is full, Angel Rubio, director of Latin America for Urner Barry, told Undercurrrent News. 

Yet there continues to has been plenty of demand in China, where Ecuadorean exporters are travelling this week to continue scoping out the growing market.

 

 

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