Summer 2007—The Japanese Shrimp Market

Market Trends: As the summer 2007 sales period began, shrimp prices firmed up.  The subtle balance between buyer and seller seemed to tilt in favor of the seller, especially in the tiger market (Penaeus monodon), while prices for white shrimp (P. vannamei) remained low.

The First Quarter of 2007: Compared to the first quarter of 2006, imports of all types of shrimp into Japan during the first quarter of 2007 fell by nearly 12%, declining to 53,848 metric tons from 61,061 tons.  Shrinking demand for headless shell-on shrimp from the catering trade was the main reason for the decline.

A post Golden Week (the first week in May when several Japanese holidays occur) survey on the shrimp trade showed that demand for shell-on shrimp from institutional users and the catering trade was down from 2006.  Large black tigers (8/12 and 13/15 counts) were not in demand.  The big sellers were 16/20s through 41/50s.  Demand for peeled tail-on “nobashi” shrimp was higher than last year, especially for sizes ranging from 8/12 through 16/20.  The catering trade was the main user for this product.  Demand for nobashi from the food service sector increased at least 10% from 2006.  This explains the lower imports of shell-on shrimp, particularly black tigers, during the first quarter of 2007.  Retail demand for “thawed/fresh” shell-on shrimp sold in supermarkets has moved from black tiger and sea-caught whites to less expensive vannamei.  This summer, however, supermarket sales of shell-on vannamei are rather low as Japanese households avoid cooking during the hot and humid summer season.  Consumer preference has also shifted from raw shell-on product to peeled vannamei and to easy-to-cook and easy-to-prepare products.  Tempura products have become popular at fast food shops and restaurants, but households avoid them during the summer, when the preference is for blanched and cooked shrimp.

January to May 2007: From January to May 2007, customs data indicate that average monthly imports of shrimp fell by 1,515 tons with a cumulative decline of 7,575 tons during the first five months of 2007.  Overall imports of frozen raw shrimp during January-May were 10% behind last year’s corresponding period.  Higher imports from Thailand, China and Malaysia were mostly vannamei.  Black tiger shrimp imports from India, Vietnam, Bangladesh and Myanmar were lower due to the off season for farmed shrimp from January to April in those countries.

For the July-August promotional campaign, Japanese supermarkets have added tray packs of 13/15 and 16/20 count headless black tiger shrimp.  Some supermarkets have decided to increase the sales ratio of black tiger to vannamei from 50:50 during the last two years to 70:30 in 2007.  As their prices have fallen, supermarkets have also added large, sea-caught white shrimp to their mix of shrimp products.  There is good demand for peeled, sea-caught white and flower shrimp (probably P. semisulcatus) from processors of value added products.

Shell-on vannamei imports are mostly from Thailand, which has a reputation for producing antibiotic-free shrimp.  Some industry leaders forecast higher imports of black tiger shrimp this year from countries practicing extensive farming.

Outlook: The Japan/Thailand bilateral free trade agreement facilitates imports from Thailand.  Shrimp imports will continue to be influenced by the yen/dollar exchange rate and demand patterns in the European Union and USA.  In Asia, the shrimp harvest begins in May, so Japanese importers expected significant price drops for shell-on black tiger shrimp when the first harvests hit the market, but it didn’t happen, although vannamei prices trended lower.  Prices of farmed vannamei may weaken further, especially for Chinese vannamei, which faces quality challenges.  It is important to note that this year’s summer sales promotions in many supermarkets have featured large black tigers.

With the current good demand for black tiger shrimp worldwide and a balanced supply pattern, the market for this species will be steady compared to vannamei, which will most likely continue to trend lower.  Following the automatic detention ruling on farmed shrimp from China in the USA, more Chinese vannamei will possibly be offered to Japan.  Simultaneously, there will be higher demand for vannamei from Thailand and other Southeast Asian countries, specifically for cooked and breaded products.

Source: Globefish.  Shrimp Market Report/Asia (http://www.globefish.org/index.php?id=4218).  Fatima Ferdouse.  July 2007.

How the Shrimp Tariff Backfired

The tariff on imported shrimp was supposed to protect USA shrimp fishermen by reducing shrimp imports and pushing domestic shrimp prices up.  Just how has the tariff affected the domestic shrimp market?  According to data published by the National Marine Fisheries Service (NMFS), total shrimp imports to the United States have increased by 14 percent since the tariff was imposed, while domestic shrimp prices have decreased by 9 percent.  In addition, shrimp imports from the six countries targeted by the tariff have increased by almost 20 percent since the tariff was imposed.  These were not the results that the Southern Shrimp Alliance (the coalition of the shrimp fishermen and shrimp processors in southeastern USA that filed the dumping case) and the Department of Commerce expected.  What happened?

Entrepreneurs responded to the shrimp tariff in ways that policymakers at the Department of Commerce did not anticipate.  USA importers, for instance, responded even before the tariff was officially in place.  They began switching shrimp suppliers in 2004, while the Department of Commerce was investigating the dumping petition.  NMFS data bear this out.  In 2003, shrimp imports from Brazil, China, Ecuador, India, Thailand and Vietnam totaled more than 822 million pounds, accounting for 74 percent of total shrimp imports.  In 2004, the year the Department of Commerce investigated the dumping petition, imports from the six countries targeted by the dumping petition fell 13 percent to 712 million pounds, amounting to 62 percent of total shrimp imports.

Yet total USA shrimp imports rose from 1,112 million pounds in 2003 to 1,141 million pounds in 2004, an increase of almost 3 percent.  Shrimp imports from several nontargeted countries increased dramatically.  Imports from Malaysia increased by 880 percent, from Indonesia by 116 percent and from Bangladesh by 113 percent.  Overall, USA shrimp imports from the countries not targeted by the dumping petition rose from 290 million pounds in 2003, to 429 million pounds in 2004, an increase of 48 percent.

USA shrimp buyers were not the only market participants to respond to the dumping tariff in a creative way.  Shrimp producers in the six dumping countries also responded in resourceful ways, ways that Department of Commerce policymakers also did not anticipate.

The Department of Commerce imposed the dumping tariff in January 2005—and the total shrimp imports from the six countries on which the tariff was imposed increased rather than decreased.  In 2005, shrimp imports from the six increased to 744 million pounds, up 4.5 percent from the 2004 total of 712 million pounds.  In 2006, imports from the six jumped 14.5 percent to 851 million pounds.

How did that happen? Why did shrimp imports from the six targeted countries increase after the tariff was imposed on them?  Value-added shrimp products, such as breaded shrimp and prepared shrimp meals, are exempt from the tariff.

NMFS data show that, while shrimp producers in Brazil, India and Vietnam found other markets for their shrimp (primarily Europe and Japan), Ecuador and especially China and Thailand shifted their production to value-added products that were exempt from the tariff.  USA imports of breaded shrimp increased 169 percent from 36.5 million pounds to more than 98 million pounds in 2005, and then rose another 11 percent in 2006.  USA imports of prepared shrimp meals increased moderately in 2005, then jumped 40 percent from 184 million pounds to 257 million pounds in 2006.  China and Thailand now account for 93 percent of USA imports of breaded shrimp and 75 percent of USA imports of prepared shrimp meals.

Plunder: When the Southern Shrimp Alliance filed its dumping petition in December 2003, a USA law known as the Byrd amendment (named after Senator Robert Byrd and formally called the Continued Dumping and Subsidy Offset Act) was in place.  Under the Byrd amendment, the federal government transferred all revenues collected from a dumping tariff to the parties that filed the dumping petition.  In 2006 alone, despite the creative responses of domestic shrimp buyers and foreign shrimp producers, SSA received $100 million under the Byrd amendment.  The money was distributed among hundreds of domestic shrimpers.

The Byrd amendment was repealed in February 2007, but that hasn’t stopped the plunder.  With the help of some high-priced lawyers, SSA filed a special appeal with the Department of Commerce that threatened foreign shrimp producers with more extensive tariffs.  The move worked: more than 100 foreign shrimp suppliers paid SSA millions of dollars in return for its promise to drop the petition.

SSA has used the money to pay its high-priced lawyers, to pay lobbyists to rally government support for the industry, and to pay office expenses.  Its clients—domestic shrimpers—receive nothing.  Thus, the beneficiaries of the shrimp tariff are no longer domestic shrimpers, but lawyers and lobbyists.

Information: Ludwig von Mises Institute, 518 West Magnolia Avenue, Auburn, Alabama 36832-4528 USA (phone 334-321-2100, fax 334-321-2119, email contact@mises.org, webpage http://www.mises.org).

Source: Ludwig vin Mises Institute.  How the Shrimp Tariff Backfired (http://www.mises.org/story/2644).  Don Mathews (dmathews@cgcc.edu, teaches economics at Coastal Georgia Community College) and Aleksandra Dunaeva (dunaevaa@coast.cgcc.edu, an economics student at Coastal Georgia Community College).   August 1, 2007.

Country Reports

Australia

Importers Fight Ban on Raw Shrimp Imports

The Seafood Importers Association of Australia says that imported raw shrimp poses no disease threat to Australia’s commercial shrimp fishery or to its shrimp farms—a direct challenge to information provided by Biosecurity Australia.

Source: FisheNews (an email supplement to Austasia Aquaculture magazine, www.austasiaaquaculture.com.au).  Editor, Tim Walker (austasiaaquaculture@netspace.net.au).  Prawn Importers Provide Information.  August 3, 2007.

Australia

Asian Countries Challenge Australian Rules

Thailand will join the nine-member Association of Southeast Asian Nations (ASEAN) and drag Australia before the World Trade Organization over Australia’s tough new restrictions on shrimp imports.

The group—which includes China, Vietnam, Taiwan, Indonesia, Malaysia and the Philippines—claims Australia’s quarantine requirements are a non-tariff trade barrier aimed at protecting the $51 million local industry from the $2 billion import industry.

The move to take Australia to the WTO disputes panel follows last-ditch discussions held on August 6, 2007, in Canberra (Australia’s capital) between Thai officials and the Australian regulator, Biosecurity Australia.

According to Thai officials, the requirements are unnecessary, onerous and scientifically unsound.  Bangkok-based shrimp biologist Tim Flegel, with Mahidol University, accompanied the Thai officials to the meeting.  He said it was “very likely” that Australia would lose the case, especially as the WTO’s World Animal Health Organization was revising its guidelines on transferable diseases to specifically exclude shrimp sold for human consumption from the so-called “disease-risk pathway”.

A member of the Thai delegation told an Australian newspaper that the ASEAN group was likely to seek compensation for losses.  If Australia loses the dispute, it may face compensation payments of $500 million for every year the restrictions last, according to an estimate by Harry Peters, president of the Seafood Importers Association of Australia, an industry body whose 40 members handle about 80 percent of seafood imports.

A spokesman for Trade Minister Warren Truss said the Government would robustly defend any action brought against Australia by the shrimp exporters.  “Every decision we make is science-based and WTO-compliant,” he said.

Source: The Australian.  WTO to umpire row over prawns (http://www.theaustralian.news.com.au/story/0,25197,22200785-30417,00.html).  Leigh Dayton.  August 7, 2007.

Bangladesh

Floods

Most of Bangladesh is underwater as a result of unusually heavy monsoonal rains during summer 2007.  In Khulna, southwest Bangladesh, the center of the shrimp farming industry, ten villages were inundated and shrimp in 2,000 shrimp ponds were washed away because of breaches at a local sluice gate.

Source: The Daily Star.  Flood Situation Worsens: Part of Dhaka-Aricha road goes under water (http://www.thedailystar.net/2007/08/03/d7080301055.htm).  August 3, 2007.

China

Detention Without Physical Examination

Chinese shrimp products are now subject to “detention without physical examination”, which means that USA importers must secure documentation from a private lab that its products meet USA food safety standards before they can enter the USA market.  Once an importer demonstrates that five consecutive shipments of its shrimp are free of contamination, its shrimp are released from the import alert and again subject to only minimal inspections by FDA.

Information: Deborah Long, Southern Shrimp Alliance (phone 785-539-5218, email deborah@cohesivecommunications.com).

Source: Email to Shrimp News International from Deborah Long at the Southern Shrimp Alliance.  Shrimp Industry Welcomes Congressional Attention to Seafood Safety.  August 2, 2007.

Greece

Penaeus japonicus

Limited quantity of Penaeus japonicus postlarvae for sale.

Information: Steve Dolarakis (s_dollars@yahoo.com).

Source: The Shrimp List (a mailing list for shrimp farmers, “shrimp-subscribe@yahoogroups.com”).  Subject: [shrimp] Japonicus Pls.  From: s_dollars@yahoo.com.  August 1, 2007.

Pakistan

New Species of Freshwater Prawn?

In July 2007, a new species of freshwater prawn was reported in Pakistan.  Shrimp News checked with Michael New, author, prawn farming expert and currently director of Aquaculture Without Frontiers (an independent nonprofit organization that promotes and supports responsible and sustainable aquaculture and the alleviation of poverty by improving livelihoods in developing countries) to see if he knew anything about the new species.  Michael passed my request on to Dr. Narayanan Kutty in India, who responded:

Most likely the “new” species is Macrobrachium malcolmsonii (the monsoon river prawn, according to FAO terminology).  As no other prawn species of the reported size is known to occur in the Indian subcontinent and the historical fact that that  100 tons of this prawn have been reported to be caught from Pakistan’s Indus River, I feel that the report cannot be of a new species.

Information: Prof. (Dr.) M.N. Kutty, “Prasadam”, 10(5)/389 Puthur, Palakkad, 678001 Kerala, India (phone 91-491-2538882, fax 91-491-2526974, mobile 91-9446944432, email kuttymn@gmail.com and drkuttymn@dataone.in).

Information: Michael New, Aquaculture Without Frontiers (email michaelnew339@btinternet.com, webpage www.aquaculturewithoutfrontiers.org).

Source: Email to Shrimp News International from Michael New on August 5, 2007.

Thailand

Shrimp Exports to Japan Expand

Bangkok...Niwat Sutheemeechaikul, department deputy director-general of the Thai Fisheries Department, said, that exports of Thai shrimp products to Japan are expected to increase by $162 million by the end of 2007, after receiving recognition for quality among consumers at the 9th Japan International Seafood & Technology Expo on July 18-20, 2007.  Many Japanese importers have turned to Thai fishery products because they are confident of their quality and safety.  The trade in marine products from China and Vietnam has experienced difficulties because products imported from both countries were found to be contaminated with antibiotics.

Source: MCOT News.  Thai shrimp exports to Japan look bright (http://etna.mcot.net/query.php?nid=30903).  August 6, 2007.

United States

Job Somewhere

We are looking for someone with a BS or MS in the biological sciences to raise shrimp in an intensive, heterotrophic system.  Please do not apply if you do not have a USA work permit.  Closing Date: Monday, October 29, 2007.

Information: jobsaquaculture@yahoo.com.

Source: AquaNic (The Aquaculture Network Information Center, a gateway to the world’s electronic aquaculture resources, http://aquanic.org/index.htm).  Jobs Directory (http://www.aquanic.org/Text/job_serv.htm)/In cooperation with the WAS Employment Service.  Search jobs (http://aquanic.org/jobs/search.asp).  Shrimp aquaculturist intensive systems (http://aquanic.org/jobs/jobinfo.asp?jobid=2512).  August 2, 2007.

United States

Louisiana—Odom Exceeds Authority

On August 1, 2007, a Louisiana judge ordered state Agriculture and Forestry Commissioner Bob Odom to stop seizing and testing imported seafood for illegal antibiotics.  During the suspension, the judge will determine if Odom has the authority to do the testing.  The judge’s order stems from a lawsuit Piazza’s Seafood World in Saint Rose, Louisiana, filed in June 2007, arguing that only the State Department of Health and Hospitals (DHH) and the USA Food and Drug Administration have the right to regulate food products.

Odom contends that the Louisiana’s Weights and Measures Act and a year-old agreement he has with the DHH give him the authority to test food products for antibiotics and pesticides.

In May 2007, Odom detained about 150,000 pounds of seafood valued at more than $1.4 million from Southern Cold Storage in Baton Rouge, Louisiana, where Piazza’s Seafood stores its products.  The seafood remains in state custody.  The judge’s order is not final, but does indicate that Piazza’s has a “strong chance” of winning the lawsuit.

“This appears to be a noble cause that the commissioner of agriculture wants to protect the health and welfare of the citizens of this state by regulating and testing seafood,” said Louisiana District Judge William Morvant.  “The question I have to decide is whether [Odom] is the proper person to carry that banner.”

Source: Seafood Currents (an online newsletter from Seafood Business, www.seafoodbusiness.com).  Judge: Odom must stop seizing seafood (http://divcom-seafood.informz.net/admin31/content/template.asp?sid=3858&ptid=154&brandid=3138&uid=752859429&mi=169307).  August 3, 2007.

United States

Massachusetts—Replikins

Replikins LLC has discovered a new group of virus structural peptides within virus proteins called “replikins” that provide virus-specific advance quantitative warnings of rapid replication and the risk of epidemics.  Replikins LLC has developed software called ReplikinsForecast^TM that quantitatively measures the concentration of these specific peptides in virus proteins.  Increased replikin counts give advanced warning by frequently preceding a virus outbreak by one or two years and then return to lower levels in advance of quiescent periods.

In the laboratory, high replikin counts in Taura shrimp viruses are quantitatively related to high mortality rates in shrimp.

Information: John McKenney, Replikins LLC, 38 The Fenway, Boston, MA 02215 USA (phone 617-536-0220, email jmckenney@replikins.com, webpage http://www.replikins.com).

Source: Genetic Engineering and Biotechnology News.  Replikins LLC Finds West Nile Virus Replikin Count Has Reached Its Highest Recorded Value (http://www.genengnews.com/news/bnitem.aspx?name=21224396).  August 3, 2007.

United States

Mississippi—USDA Grant for Prawn Research

On August 6, 2007, USA Agriculture Secretary Mike Johanns awarded $1.3 million in grants for new and innovative approaches to marketing USA food and agricultural products.

The Mississippi Department of Agriculture and Commerce, in cooperation with Mississippi State University, received $55,875 to gather data on the acceptance and pricing of USA farm-raised freshwater prawns (Macrobrachium rosenbergii).

Source: SWNEBR.net.  Johanns Announces Ag Marketing Grants to 21 States; Nebraska not on the list (http://www.swnebr.net/newspaper/cgi-bin/articles/articlearchiver.pl?161580).  August 6, 2007.

United States

South Carolina—Live Crustaceans in Your Luggage

This exchange took place on Crust-L (below), a mailing list for crustacean scientists:

Erik Sotka (email sotkae@cofc.edu): I’m curious.  Have any of you attempted to carry live crustaceans on an airline in this post-9/11 world.  My understanding is that no more than three ounces of liquid can be in any one container and that I can only carry as many of those containers as will fit in a quart-size ziploc bag.  I’m trying to transplant hundreds of live amphipods from New England to my laboratory in South Carolina.  Information: Erik Sotka, Ph.D., Assistant Professor of Biology, College of Charleston, Grice Marine Laboratory, 205 Fort Johnson Charleston, SC 29412 USA (phone 843-953-9191, fax 843-953-919, email sotkae@cofc.edu).

Mary Wicksten (wicksten@mail.bio.tamu.edu): Erik, Can you ship your animals in a cooler?  I’ve checked crustaceans through in a “six-pack” cooler.  They did well on a four-hour flight.

Michael Hissom (moontanman@aol.com): Erik, I ship aquatic organisms via next day and or second day mail.  Mostly tiny pygmy sunfish and dwarf crayfish.  As for bringing them on board with you, I’ve never tried that but you might try this address nanfa-l@nanfa.org, which should have some information on shipping live crustaceans.

Pete Key (pete.key@noaa.gov): Erik, We ship live grass shrimp via FedEx in a cooler (with ice packs in the summer) year around with no problems.  We have received mysids, amphipods and copepods the same way with little trouble.

Source: The Crust-L Mailing list (To subscribe, send an email to LISTPROC@VIMS.EDU.  In the body of the email, put SUBSCRIBE CRUST-L).  Subject: [CRUST-L:2910] carry-on transport of aquatic organisms.  July 29, 2007 through August 2, 2007.

United States

Washington, DC—FDA Posts Drug Rules

On July 26, 2007, the Food and Drug Administration (FDA) issued final regulations on the Minor Use and Minor Species Animal Health Act of 2004.  The MUMS Act amended the Federal Food, Drug and Cosmetic Act by, among other things, establishing Section 573 to establish new regulatory procedures that provide incentives intended to make more drugs legally available to veterinarians and animal owners for the treatment of minor animal species like fish and shellfish.  The final rule will become effective on October 9, 2007.

To encourage the development of drugs for minor uses or in minor animal species, MUMS designation of a new animal drug grants the drug’s sponsor seven years of exclusive marketing rights.

Information: Dr. Bernadette Dunham, Center for Veterinary Medicine, FDA, 7519 Standish Place, Rockville, MD 20855 USA (phone 240-276-9090, email bernadette.dunham@fda.hhs.gov).  For additional information on animal drugs for minor uses and minor species, see http://www.fda.gov/cvm/minortoc.htm.

Source: Aquafeed.com (The free E-zine for aquafeed professionals, http://www.aquafeed.com).  FDA Publishes Final Rule on Designation of New Animal Drugs for Minor Uses or Minor Species (http://aquafeed.com/read-article.php?id=2093&sectionid=1).  Editor, Suzi Fraser Dominy (email editor@aquafeed.com).  August 1, 2007.

United States

Washington State—Bacillus Substantially Reduces Sludge

Steven Newman, president of Aqua-In-Tech, reports:

Our product, a consortium of three strains of Bacillus (subject of USA Patent #5746155), has been found to substantially reduce sludge in catfish ponds and in shrimp ponds.  It’s now available in a tablet format.  The tablets are added to ponds at a rate that ranges from a minimum of 150 per cycle per hectare for semi-intensive ponds to more than 5,000 per hectare per cycle for high density ponds.  The dosage depends on water quality and environmental parameters.  The tablets drop to the bottom of the pond where they dissolve and deliver the bacteria directly to the sludge.  Each tablet contains approximately 50 billion colony-forming units (CFU) and weighs 13 grams.

Lab Trials: Trials in aquaria have confirmed that the bacteria in the tablets (which are identical to the bacteria in our granular product AquaPro-B) rapidly degrade organic material resulting in improvement in water quality with concomitant drops in the level of algae in the aquaria.

Field Trials: In 2007, during its first production cycle, Royal Mayan Sea Farms, Ltd., located in the Mango Creek area of Belize, tested the tablets in semi-intensive (stocked at 25 postlarvae per square meter) and intensive (stocked at 60 postlarvae per square meter) Penaeus vannamei ponds.  Here are some of the results:

• Improved growth: In recent years growth rates in Belize have averaged around 0.8 grams per week during the first cycle of the year.  Average growth rate this year in ponds treated with the tablets was 0.98 grams per week, allowing for shorter production cycles and more cycles per year.

• Less fuel: Changes in the pond chemistry and the types of algal flora in the ponds have allowed Royal Mayan to move to a once-a-week water exchange program without impacting production.  This alone has resulted in savings of $10 in real costs for each $1 spent on the product.

• No antibiotics: The use of our product has allowed the farm to completely eliminate antibiotics.  When bacterial disease outbreaks are apparent, adding the tablets stops the problem in its tracks.

• Cleaner pond bottoms: Farm managers are reporting that there is less accumulated organic material in the ponds at harvest.  Efforts are underway to target those areas where there is some accumulated sludge to even further reduce it.  The tablets allow targeted delivery.

• Changed pond flora: In general, Royal Mayan sees higher levels of green algae in ponds where there has always been problems with blue green algae, creating a more hospitable rearing environment.

Overall, this farm is reporting a substantial positive benefit on its bottom line from the use of these tablets.  The cost benefit when everything is taken into account is greater than $12 for every $1 spent on the product.

Information: Stephen G. Newman, Ph.D., President, Aqua-In-Tech, Inc., 6722  162nd Place SW, Lynnwood, WA 98037 USA (phone 425-787-5218, fax 425-741-0857, email sgnewm@aqua-in-tech.com or sgnewm@gmail.com, webpage http://www.aqua-in-tech.com).

Source: Email from Stephen Newman at Aqua-In-Tech to Shrimp News International.  Press Release.  AquaPro B Tablets for direct addition to ponds and hatchery tanks.  August 3, 2007.