US Imports of Value-Added Shrimp Falling, Ecuador and India Faring Better than Other Origins

As with frozen shrimp, United States (US) imports of prepared or preserved shrimp (HS code 160521) continue to decline so far into 2023. Ecuador and India also continue to gain market share in this sector, despite that other countries are more competitive in this market, in contrast with the frozen shrimp (HS code 030617) market.

How are US imports of prepared or preserved shrimp (value-added shrimp) faring so far this 2023?

From Jan-23 to Apr-23, the US imported 50.2 thousand mt of prepared or preserved shrimp, not in airtight containers (HS code 160521), with a total worth of USD 461 million. Volume imported declined by 28% year-over-year (YoY), while its value fell by 32% YoY, as the average import price also fell by 5% YoY.

How much do value-added shrimp imports represent among all US shrimp product imports?

Products under HS code 160521 (prepared or preserved shrimp, which can be referred to as value-added shrimp) represent the second largest shrimp product category imported into the US, representing 26% of the total import value of all shrimp products in 2022 (USD 2.0 billion out of USD 7.8 billion). Frozen shrimp (HS code 030617), in comparison, represented 72% of the total last year (USD 5.6 billion).

Why are US imports of value-added shrimp declining?

The main driver behind the declining import value for this product is the lower quantity imported, as the price decline has not been that significant (-5%), especially when compared to the decline in frozen shrimp (-16%).

As reported in previous Tridge analyses, an oversupplied market is the main reason behind the decline in quantity imported. There was a surge in imports of shrimp products during 2021-2022, driven by expectations of higher demand following the easing of pandemic restrictions. Nonetheless, as inflationary pressures (driven by supply chain disruptions and the start of the Russia-Ukraine conflict) sharply rose, consumer demand for this product waned. It left a glut in this market and remains in place to date.

Which countries are the main import origins and which ones are gaining market share?

In Jan-22 to Apr-22, the main import origin in terms of value was Indonesia, with USD 220 million or 32% of the total. It was followed by India (USD 161 million, 24%), Vietnam (USD 157 million, 23%), Thailand (USD 96 million, 14%), and Ecuador (USD 23 million, 3%).

However, in Jan-23 to Apr-23, Indonesia's share fell to 31%, Vietnam's to 20%, and Thailand's to 12%, while India's rose to 28% and Ecuador’s to 5%.

It’s worth noting that in Jan-23 to Apr-23, imports from the top five origins fell by sharp double-digit YoY declines, except in the case of Ecuador, where imports actually rose 3% in value.

Source: Tridge and USDA

Why are India and Ecuador gaining market share in this market too?

In contrast with the frozen shrimp market, neither India nor Ecuador have the lowest export prices for this product among the top origins. The lowest price belongs to Indonesia, which explains why this country remains in the top spot. Nonetheless, India’s exports are falling at rates lower than the rest of the origins while those of Ecuador, as mentioned above, managed to increase. It seems that as these countries gain market share in the US frozen shrimp import market due to their more competitive prices in this sector, the trade of their value-added business also increases (or falls less).

What can be expected for this market in the upcoming months?

As of Apr-23, US import prices of value-added shrimp fell at the fastest YoY decline pace since April 2019. As of May and June, prices of unprocessed shrimp in most exporting countries continued falling. In Ecuador particularly, there were reports of lower demand out of China driving prices to fresh lows. In the short-term, this market is expected to remain subdued. Yet, downside is limited as further declines will eventually drive demand higher. Moreover, potential lower supply in Ecuador and India caused by unfavorable weather could also help boost prices in the upcoming months.