SeaFood Business

JUN 2014

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Top Species 26 SeaFood Business June 2014 Visit us online at www.seafoodbusiness.com Photo courtesy of National Aquaculture Group Farmed shrimp Road to recovery: Industry turns corner after EMS devastation BY JOANNE FRIEDRICK I t is a case of lessons learned and contingency plans put into place for the farmed shrimp industry as it con- tinues to deal with the af- termath of a global shortage brought on by early mortal- ity syndrome (EMS). In the wake of EMS, farmed shrimp supplies dropped and prices rose. In March, the U.S. Bureau of Labor Statistics reported that shrimp prices had jumped by 61 percent over the previous year. Te outbreak of EMS in Southeast Asia impacted suppliers in Tailand and Vietnam, which historically have been major farmed- shrimp producing countries. Fortunately, other coun- tries have picked up some of the supply slack and that has brought prices down. Gorjan Nikolik, associate director of animal protein for Rabobank International's Food & Agribusiness Re- search and Advisory sector in Utrecht, Netherlands, says, "from a supply point of view, we did expect strong growth from Ecuador and In- dia, which clearly happened. Te expansion of vannamei farming in India is continu- ing and the region has strong momentum. Te growth of supply from Indonesia and Vietnam, at least based on trade data of the frst few months of 2014, is impres- sive and was not expected." Chicken of the Sea Frozen Foods "has moved a large percentage of its purchases away from afected countries to more stable ones" in an ef- fort to "remain competitive and maintain continuity of supply for our customers," according to Bogdan Serbu, marketing manager. "We are seeing a new bal- ance of supply and demand," adds Serbu, "and while we feel that there will be vola- tility over the intermedi- ate term, we anticipate that supplies will adequately fll demand on most sizes and product forms." Part of the equation, says Serbu, has been a lessening in demand because prices have risen. "We've seen demand on a customer-by-customer basis decrease moderately less than the corresponding increase in price," he says. "For example, if prices have increased by 30 percent, we've seen customer-specifc demand decrease by 20 to 25 percent, depending on the channel of trade." Scott Williams, associate VP of quality assurance and environmental stewardship for BJ's Wholesale Club, which is headquartered in Westborough, Mass., ac- knowledges that his price changes have mirrored those experienced by the industry, and that supply is now shift- ing to new locations. In April, Williams visited India and Indonesia looking for new sources after cur- rent suppliers in Vietnam and Tailand were afected by EMS. "We rode out last year," says Williams, "and this year the conversation has been about what if those countries don't come back?" Williams is fnding a "mixed bag" in terms of the quality of factories, and has approached them on an indi- vidual basis, scoring them as A, B or C factories based on what they can supply. "A big part of it is just the new infrastructure," says Williams, noting that Tai- land and Vietnam had been supplying shrimp for so long that many of the systems were already in place. "Some of these other countries are new to it and we have to fgure out what information they need from us," he says, referring to production qual- ity and standards. Although Tailand and Vietnam are likely to resume production at some point, Williams says moving to new suppliers is not a temporary solution. Rather, he says, BJ's is looking to establish rela- tionships that are for the long term. "Our goal is where can we get the best quality at the best value. If Tailand and Vietnam come back, we could continue a partner- ship" there as well, he says. Te outcome will be a more diversifed selection, says Williams. Tat still Buyers are considering all options in the wake of early mortality syndrome. 26-29 top species june sfb.indd 26 5/15/14 10:25 AM

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