coldwater shrimp market analysis for 2019 - new brunswick · 2019. 4. 3. · • preseason price...
TRANSCRIPT
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Coldwater Shrimp Market Analysis for 2019
John SacktonSeafood Datasearch
March 25, 2019
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Background• 40 Years in Seafood Industry
• Crab, shrimp and lobster
market analyst since 1997
• Preseason price and market
outlooks on shrimp, crab,
lobster – Atlantic Canada,
Alaska, and US West Coast
• Price arbitrator for Alaska crab
• President of Seafood
Datasearch Market Consulting
• Co-Founder of NFI’s Global
Seafood Market Conference
• Publisher of Seafood.com News
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How to Analyze Seafood Markets
TheQuestiononeveryone’sMind:
Whatwillbethevalueofshrimpthis
season?
Factorstogetatananswer:
LocalandGlobalSupply
MarketDemand
CompetitiveProducts:
(volume;productform,substitutes)
ForeignTrade
ChangessincelastSpring
Over the next 45 minutes we will look in depth at these factors
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The global coldwater shrimp supply trends have stabilized
• GlobalLandingsofPandalusshrimphavestabilized,andmayincreasein2019
• Largelyduetomorefavorabletemperaturefactorsandinteractionswithcod
• SingleFrozenCookedandPeeledproductionwillnotgrowasmuchasoveralllandingsduetoincreasedfreezertrawlersinBarentsSea.
• Canadianinshoreproductionmaybestabilizingatalowlevel.
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Global Pandalus Production
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Est
LandingsofPandalusShrimp
Canada US EU Norway Iceland Sweden Russia Greenland
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Shrimp and Cod
• Codstocksdecliningoratplateau:
• BarentsSea• Canada• WestGreenland• Result:morefavorableenvironmentforshrimp
Dr. Carsten Hvingel has madethe connection between shrimp and cod at ICWPF
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Global Pandalus production will stabilize and begin to increase
• BarentsSeaisprimaryexample.• InCanada,shrimpandsnowcrabstockshaveincreasedanddecreasedtogether.
• Althoughatlowlevel,latestsurveysshowsomesignsofareturntoamorefavorableenvironmentforcrabandshrimp.
• IntheGulf,thelargestockofredfishmaybecomeafactorinshrimpabundance
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Pandalus Cooked and Peeled Production
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Est
MetricTons
EstimateofSingleFrznCookedandPeeledLandings
Canada US Norway Greenland25%
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Changes in C&P AvailabilityRole of Twice Frozen
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Est
MetricTons
SingleFrozenCookedandPeeled FrozenatSea
RussianBarents sea Quota is up 20,000 tons In 2019
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US Production of Cooked and Peeled
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2014 2015 2016 2017 2018
CPProductVolum
e
AxisTitle
USProductionofCookedandPeeledJordaniShrimp
Fresh USFzn Exports USLandings OregonLandings
Landingsvolume
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Canadian Production of Cooked and Peeled
0
5,000
10,000
15,000
20,000
25,000
30,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Est
MetricTonsC&PProduction
MetricTonsLandin
gs
CanadianCookedandPeeledProduction
C&PProduction CanadaOffshore CanadaC&P
Offshore landings
Inshore landings
C&P Production (right scale)
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Discussion of C&P volume
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2017 2018 2019
LandedWeightforC&PRawMaterial
ExpectedRawMaterialforC&P
US Canada Norway GreenlandInshore GreenlandTwiceFzn
• C&P Volume Stable• US and Norway may
Increase• Canada Inshore
may decline in Gulf• Greenland should
be stable
It is not clear how much industrial twice frozen C&P willbe produced, as this depends on market prices and demand.However more fishing in Barents Sea will lead to higher factorytrawler production.
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Market demand and supply appear relatively balanced
• Mostpriceshavebeenstableoverthepastfewmonths,suggestingabalancebetweendemandandsupply.
• ThepricedifferencebetweenjordaniandP.borealisvaries,withsomeevidenceoflargervariationonsmallersizes.
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Pricing for East Coast Pandalus
2018 prices have stabilizedamong all sizes
Percent change in prices indicates period of weakness
in 2017 has ended
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Percent change in price P. borealis vs P. jordani 250-350
-30.00%
-25.00%
-20.00%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Monthlychangeinpricingfor250-350P.borealisvsP.jordanipercentchange250-350UB 250-350westcoast 350-500WestCoast
300-500 jordani
250-350 jordani
250-350 borealis
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Price differential between East Coast Pandalus and West Coast Jordani
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
UB150-250 Jordani150-250 Ub250-350 Jordani250-350
YearlyAveragePricesBorealisvsJordani
2016 2017 2018
150-250 250-350
2016 -0.42 -0.42
2017 -0.35 -0.61
2018 -0.49 -0.66
average market price differential
In 2017 there was a sharp drop in pricing between March and May.According to industry sources, the quick recovery in Borealis was not matched by Jordani pricing, and it took until August before 250-350 prices recovered
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Iceland Twice Fzn to UK also shows period of weakness in 2017, recovery in 2018
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
Jan-16
Mar-16
May-16Jul-16
Sep-16
Nov-16
Jan-17
Mar-17
May-17Jul-17
Sep-17
Nov-17
Jan-18
Mar-18
May-18Jul-18
Sep-18
Nov-18
Jan-19
Convertedto$USperLb
Iceland2XFznSalestoUK
100-200 250-350 500-800
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US exports to Canada and Denmark
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
UScoldwatershrimpexports
Canada Denmark CanadaPrice DenmarkPrice
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Canada (single fzn) and Iceland (twice fzn) Sales to UK
-
1.00
2.00
3.00
4.00
5.00
6.00
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
CanadaandIcelandtoUK
Canadalbs Icelandlbs Canadaval IcelandValue
CA $4.88Ice $4.50
Differential between once and twice frozen averages around $0.38 per lb
Differential between once and twice frozen of $.20 to $.30 acceptedDifference in price of $.60 to $.70 is not; more users switch.
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Market demand issues• Increasesinsupplywilllikelycomefromtwicefrozencookedandpeeledshrimp.
• Industrialshrimparegenerallysmallersizes,aslargersizesaresoldascookedonboardinshell.
• Iftwicefrozenmarketadjustsdownwardthissummer;willsinglefrozenfollow,orwillthepricedifferentialgetwider?
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Substitutes and competitive products for Cooked and Peeled
• Singlebiggestsubstituteistwicefrozenforoncefrozen.
• UKmarketbuysboth,withmorevolumeoftwicefrozenwhenpricesarefavorable.
• Danishbriningmarketrequiressinglefrozenproduct.Highpricesforborealismaysparkmoreinterestinjordani.
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Other Shrimp is also a substitute but pricing shows little correlation
Trading bands
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Primary country of substitution is UK
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Oct-1
5No
v-15
Dec-
15Ja
n-16
Feb-
16M
ar-1
6Ap
r-16
May
-16
Jun-
16Ju
l-16
Aug-
16Se
p-16
Oct-1
6No
v-16
Dec-
16Ja
n-17
Feb-
17M
ar-1
7Ap
r-17
May
-17
Jun-
17Ju
l-17
Aug-
17Se
p-17
Oct-1
7No
v-17
Dec-
17Ja
n-18
Feb-
18M
ar-1
8Ap
r-18
May
-18
Jun-
18Ju
l-18
Aug-
18Se
p-18
Oct-1
8No
v-18
Dec-
18
coldwater warm water
Holiday Sales
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US Shrimp Market is very healthy
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Retail sales increasing
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Foodservice sales of shrimp up alsoFoodservicesawaveragepricesdropduringtheyear
Althoughcoldwatershrimpisnotbrokenoutproperly,westcoastsaleswereup
Coldwater shrimp benefits from theoverall strength of this market
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Global Trade Summary• Coldwatershrimpisthelargestshareofwildcaughtshrimp,representing36%ofglobalshrimptrade.
• TheUKandDenmarkremainthelargestmarketsforcookedandpeeledshrimp,withDenmarkthemostimportantforeigntradingpartnerfortheUSandtheUKthemostimportantforCanada.
• ThenextincreaseinshrimpsupplyiscomingfromtheBarentsSea
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Canada38%
Greenland31%
UnitedStatesofAmerica9%
Norway7%
Netherlands6%
RussianFederation
6%
Denmark3%
Coldwater shrimp are 36% of wild shrimp trade
ColdwaterSpecies90% PenaeidSpecies:91%
104830
86002
24033
18697
India26%
China22%Indonesia
15%
Mexico12%
UnitedStatesofAmerica12%
Peru4%
Thailand4%
Australia3%
Brazil2%
200116
172262
118164
Wild 854.000Coldwater 308.1432016 productionArgentina red: 178.000
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US Exports
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Denmark Sweden OtherEurope China Canada
USexportsofcoldwatershrimp
2011 2012 2013 2014 2015 2016 2017 2018
Note: there appear to be some exports to China in 2018.
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US has been the most consistent Market for Canada
Seafood Datasearch, Intracen
0
1000
2000
3000
4000
5000
6000
US UK Denmark OtherEurope Asia
CanadianexportsofC&Pshrimp
2012 2013 2014 2015 2016 2017 2018
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Total Canadian C&P Exports Declining as Catch Falls
Seafood Datasearch, Intracen
0
2000
4000
6000
8000
10000
12000
2012 2013 2014 2015 2016 2017 2018
Metrictons
Total
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Danish imports dominated by Greenland
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
2012 2013 2014 2015 2016 2017
Greenland Canada UK US Iceland Sweden/Norway
As Canadian quotas decrease, Denmark makes up with Greenland
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Canadian exports of shell on shrimp
0
10000
20000
30000
40000
50000
60000
70000
2015 2016 2017 2018
MetricTons
Exportsofshellonfrozencoldwatershimp
China Denmark Iceland UnitedKingdom Japan Ukraine1 Morocco Bulgaria Albania UnitedStates(+ShowStates)
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2018 saw higher catches and pounds per trip in Oregon
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West coast historical landings and yearly avg price
Pacfin Data
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
0.0
5,000.0
10,000.0
15,000.0
20,000.0
25,000.0
30,000.0
35,000.0
40,000.0
45,000.0
50,000.0
2010 2011 2012 2013 2014 2015 2016 2017 2018
CoastWideLandingsandOregonPrice
Calif OR WA ORPrice
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Oregon Season summary from pink shrimp report: 3rd highest value
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Monthly count by poundWith bigger sizePrice differentialAnything to increaseOverall size ofCatch will be moreValuable thanUsual this year
2019 could see largersizes due to age 2 shrimp;Outlook is cautious
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Newfoundland Inshore Prices
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
$2.00
2014 2015 2016 2017 2018
NewfoundlandinshorePricesspring summer fall
Similar to Oregon, Newfoundland inshore prices rose in 2018 over 2017
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Canada in 2019
• Area 4 & 5 may be down 40%; area 6 likely stable means about 9000 CP
from NL
• Gulf will be down substantially with 20% cut or more: 11,400 tons
• Nova Scotia unchanged.
Net estimate for 2019 is around 23,000 tons, a cut of 14%
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Currently six shrimp peeling plants operating in NL
• Processingcapacityiswaytohighforcurrentquotas.
• Someplantshaveaccesstotheirownoffshoreshrimpandcanproducetwicefrozen.
• EconomicsstillfavorsalesofCAoffshoreshrimptoIcelandfortwicefrozen.
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Biggest gulf reduction in Sept Iles – perhaps 35%
300m
50m
50m
450m
500m
150m
100m
50m
200m
350m
350m300
m
350m
200m
200m
100m
400m
50m
300m
50m
450m
250m
100m
300m
50m
50m
50m
50m
350m
250m
150m
150m
50m
100m
50m
100m
100m
200m
50m
300m
50m
100m
150m
150m
100m
50m
150m
100m
150m
100m
200m
300m
50m
50m200
m
50m
250m
250m
200m
100m
300m12
10
98
Matane
Shediac
Rimouski
Caraquet
Cheticamp
Sept-Îles
Mont-LouisBaie-Comeau
Blanc-Sablon
Les Escoumins
Rocky Harbour
Port au Choix
Port Hawkesbury
Tête-à-la-Baleine
Havre-Saint-Pierre
Sainte-Thérèse-de-Gaspé
Channel-Port aux Basques
Rivière-au-Tonnerre
Natashquan
La Romaine
Île d'Anticosti
Îles de la Madeleine
Rivière-au-Renard
P3
P4 P5
E6
E3
E9
E8
P6
E5
P1
E11
E10
E1
E2
E7
E12
E4
P2
E13
E14
U.S.A
New Brunswick
Prince EdwardIsland
Nova Scotia
Newfounlandand
Labrador
Quebec
57°0'0"W58°30'0"W60°0'0"W61°30'0"W63°0'0"W64°30'0"W66°0'0"W67°30'0"W69°0'0"W
52°0
'0"N
51°0
'0"N
50°0
'0"N
49°0
'0"N
48°0
'0"N
47°0
'0"N
46°0
'0"N
CanadaFisheries and OceansCanada
±Average Annual Landed Values ($)1
Shrimp1 - 5 0005 001 - 10 00010 001 - 15 00015 001 - 20 00020 001 - 25 00025 001 - 30 00030 001 - 35 00035 001 - 40 00040 001 - 45 00045 001 - 50 000> 50 000
1 Average annual landed values for shrimp fisheries between 2008 and 2015. Georeferenced and estimated values are presented on a 6.25 km² grid.
Shrimp Fishing Area Limit
Bathymetry
Coral and Sponge Conservation Areas and
Geographical Distribution of Shrimp Landings
1:2 800 000
0 50 10025km
Produced by Fisheries Management - Quebec Region, Fisheries and Oceans Canada, 2017-10-03Projection: NAD83, Lambert conformal conic Data sources: DFO, 2017Disclaimers: This is not a navigation map and does not constitute a legal tool. Contents are subjectto change and Fisheries and Oceans Canadacannot guarantee the accuracy of all theinformation presented in the map.
Approximate Scale
Notes:i The conservation areas are identified by the number of the corresponding significant coral and sponge area.ii The projection Canada Albers equal area conic (NAD83) was used to calculate the area sizes. iii Due to rounding, the total size differs slightly from the sum of the sizes of the individual areas.iiii The total size of the significant coral and sponge areas takes into account areas of overlap, which are only counted once.
Coral and SpongeConservation Areas
Conservation Area
Conservation Area Sizei ii:
E3 = 530 km² E5 = 346 km²E7 = 845 km² E8 = 939 km²E9 = 215 km² P3 = 496 km²P4 = 821 km² P5 = 1 284 km²P6-Nord = 335 km² P6-Sud = 423 km²P3-E6-P4 = 2 338 km² TOTALiii : 8 571 km²
Significant Coral andSponge Areas
Significant Area
Significant Area Size ii:
E1 = 1 002 km² E2 = 851 km²E3 = 2 277 km² E4 = 502 km²E5 = 1 546 km² E6 = 1 621 km²E7 = 753 km² E8 = 2 168 km²E9 = 2 262 km² E10 = 1 464 km²E11 = 2 008 km² E12 = 779 km²E13 = 587 km² E14 = 568 km²
P1 = 1 537 km² P2 = 470 km² P3 = 3 993 km² P4 = 3 482 km²P5 = 3 379 km² P6 = 1 649 km² TOTALiii iiii: 32 307 km²
Sponge areas
Sea pen areas
• OtherpartsofGulfmaysee15%reduction
• HitsQuebecveryhard• Quebecalsois
principalexportertoUSbecauseplantsdon’thaveBRCcertifications.
Sept Iles Anticosti
Net result: less Canadian shrimp to the US in 2019
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Cold water shrimp Summary • Global Production of Pandalus Shrimp is Increasing,
especially in Barents Sea and Greenland• Most of this production increase will go to twice frozen
shrimp• Single Frozen cooked and peeled volumes will be lower in
2019 due to reductions in Canada, partly offset by increases in Greenland and potentially the West Coast.
• Cutbacks in the Gulf will mean more pressure on larger sizes, leading to an increased price spread by size.
• With favorable conditions, ie no return to El Nino conditions, shrimp biomass on West Coast should continue to increase.
• Overall prices have shown considerable stability• There is so far no evidence of demand for single frozen
cooked and peeled exceeding supply.
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Thank you
• TimeforQuestions