Recently, Avanti Feeds, India's largest shrimp feed producer, held an investor meeting and believed that the global shrimp market has not bottomed out at this stage, and the wait-and-see period for importers and exporters may continue for two to three months.
In India, Avanti Feeds and Thai Union Group (Thai Wansheng) have a joint venture processing plant, Avanti Frozen Foods, whose export business covers the United States, China and Europe.
Nikhilesh Alluri, CEO of Avanti Frozen Foods, mentioned: "The current US demand is very weak, and our US customers, including large retailers and catering companies, are sitting on a large amount of inventory. So we have to see how quickly they can clear their inventory. Only When they are able to take orders, we can send more products.”
"Currently, Avanti is expanding its US order sales of cooked shrimp to make up for the weak raw shrimp market. We will continue to observe and see how the market will develop in the next two to three months. It is now the holiday season and the main season for consumption , we still need to wait and see, because there is no clear answer at present."
The Chinese market is also not performing well, Alluri said, as demand fell and sales were sluggish due to epidemic control and lockdowns. "We can feel that China still has a lot of inventory, and we only know that China may not start bulk purchases until December to early January. Frankly speaking, the Chinese market has been very delicate in the past 6 to 8 months, and many Buyers are asking us to renegotiate, and a lot of them are starting to back off."
In the medium and long term, as long as China relaxes control, Alluri is still very optimistic about the Chinese market. "We know that China is very difficult, and the reasons given by importers are usually China's own reasons for the blockade, as well as weak economic conditions. So will the Chinese market recover? The answer is yes. Once China lifts the blockade, we are very sure that they will It will be like the rest of the world."
"As long as China is fully liberalized, consumption will increase, and I'm pretty sure China will become a dominant market like the US. China is very close to India, and in the long run, it is a good export destination for India," Alluri said. "But in the short term, it is very difficult for shrimp farmers in India and Ecuador. We have seen reports that prices in Ecuador have plummeted, and the government and companies seem to be trying to find a way to ensure that shrimp farmers do not lose their livelihoods due to low prices."
The situation in India is also quite pessimistic. Avanti expects that the production of white shrimp in India may drop by 200,000 tons in 2022, and the total output may be less than 700,000 tons.
C. Ramachandra Rao, general manager of Avanti Feeds, said: "Because the price of white shrimp is too low, many farmers in Andhra Pradesh have expressed that they want to 'take a rest' crop. The sales of shrimp feed have also dropped significantly this year. The export volume has fallen sharply. The United States, Europe Falling into recession, the Chinese market is blocked due to the epidemic, coupled with fierce competition from Ecuador, the shrimp industry is facing an unprecedented crisis."
Earlier this year, Avanti Feeds had forecast India's demand for shrimp feed would rise 15 percent from last year to 1.2 million tonnes. However, according to the latest forecast by Avanti, the actual consumption of shrimp feed in India may drop to 975,000-1 million tons this year.