Shrimp Prices Expected to Rise in Q3 Due to Short Supply of Shrimp Material

Shrimp farmers have been facing challenges with the supply of shrimp material since May, resulting in a decline in shrimp prices. The prolonged summer heat, salt intrusion, and the coronavirus pandemic have led to a fall in shrimp consumption, causing slow seeding and a decrease in prices. However, companies and authorities have forecasted an increase in shrimp prices from quarter III.

Supply and Demand of Shrimp Material

Despite forecasts of a short supply of shrimp material in May, the source of shrimp material has met the demand of processing and exporting, causing prices to fall. Even though the stocking of shrimp is later than in previous years, most of the stocking area is extensive or super-extensive white leg shrimp, which applies high technology. Therefore, the shrimp output in the first four months of 2020 only slightly decreased from the previous year.

Early Harvest and Partial Harvest

One reason for the sufficient supply of shrimp material in May is the changing weather, which resulted in an early harvest with a large number of small-sized shrimps. However, factories were struggling with deficient workers, leading to a decrease in processing capacity. In some areas suffering from salt intrusion and short supply of water, farmers had to carry out partial harvest or early harvest to decrease the stocking density.

For instance, partial harvest was carried out in the farming area owned by the Xuân Phú shrimp cultivation business of Sao Ta Food JSC due to a short supply of water. The director of the business, Ngô Văn Nghiệp, stated that “we had to carry out partial harvest due to the high survival rate of shrimp. We get around 40-50 tons of shrimp size 50-60 pcs/kg in the fear of deficient water to maintain the same stocking density.”

Decrease in Prices of Shrimp

While small-sized shrimps are abundant, factories are struggling with deficient workers, causing a decrease in processing capacity. As the consumption of shrimp in major markets has not recovered, prices of shrimp in the Mekong Delta fell in May but increased as forecasted, making shrimp farmers surprised and disillusioned.

Prices of shrimp, especially white leg shrimps, decreased compared to early May. However, farmers can still earn a good profit if they reach the target output. With the current price of 105,000 dong/kg for white leg shrimp size 70 pcs/kg, farmers can earn 30,000-35,000 dong/kg if they reach the target output. As for gig-sized white leg shrimps alone, if the target output is reached, and FCR is reasonable, farmers can earn 70-80%.

Expected Rise in Shrimp Prices

Despite the disillusion in shrimp prices, the speed of stocking in most farming areas in Sóc Trăng and the Mekong Delta is increasing. As usual, shrimp prices rise back from September and October when companies start their purchases to fulfill orders placed on holidays and Tet, from the end of the year until early next year.

According to companies, prices of shrimp may sustain well in early quarter III, one month earlier than the previous two years. This is forecasted upon the little stockpiles in the EU, US, and Japan. The powerhouses such as China, India, Ecuador, Indonesia, and Thailand are suffering from challenges due to the coronavirus outbreak and weather, resulting in a forecast of at least a 20% decrease in shrimp supply. It means that supply, which is lower than demand, is highly possible. Thus, shrimp prices are expected to be better from early quarter III.