Shrimp prices slump: what factors will affect shrimp prices?

I. Output surge: the root cause of oversupply

The rapid growth of shrimp production is the primary reason for the decline in shrimp prices.The rapid expansion of shrimp in small sheds in Guangdong, Guangdong and Shandong, as well as the substantial increase in the production capacity of intensive soil ponds in the Pearl River Delta region, have jointly promoted the significant growth of the total amount of shrimp culture in China.According to statistics, in recent years, the number of new sheds and the increase of single shed output have directly increased the production capacity of nearly 200,000 tons.This explosive growth of production capacity, without the support of corresponding demand growth, will inevitably lead to oversupply in the market, which will lead to price decline.

II. Import shocks: increased market competition

The rapid increase in imported shrimp has further intensified the competitive situation in the domestic shrimp market.Since 2018, China's shrimp imports have increased by about 6.6 times in five years, accounting for 43% of total consumption.This trend not only reflects the strong consumption demand of prawns in China, but also reveals the huge impact of imported prawns on the domestic market.Especially in East China and North China, due to the relatively small local consumer market, the price decline is more obvious when the production capacity increases and the import volume increases.

III. Competition for alternatives: diversification of consumer choice

Alternatives to Penaeus vannamei, such as Macrobrachium rosenbergii and Penaeus monodon, have grown in recent years and are more affordable.The rise of these alternatives not only enriches consumer choice, but also diverts some of the demand for Penaeus vannamei.When the price of alternatives falls, consumers are more likely to switch to more cost-effective products, resulting in reduced demand for penaeus vannamei and further price declines.

IV. Consumption degradation: impact of economic environment

At present, our country is facing the pressure of economic deflation, the profit and wage level of enterprises are generally under pressure, the disposable income of residents decreases, and the consumption capacity decreases obviously.In this context,"consumption degradation" has become a common phenomenon, with non-essential consumption bearing the brunt of the cuts.Aquatic products such as Penaeus vannamei, as non-necessities of life, its demand is naturally impacted.Demand is reduced and supply is excessive, and the downward pressure on prices is further increased.

V. Industry restructuring: de-capacity and market rebalancing

Faced with the continuous decline in shrimp prices and the imbalance between supply and demand in the market, industry restructuring has become an inevitable trend.On the one hand, the amount of imported shrimp may decline with market adjustment; on the other hand, some high-cost, low-benefit farming models will also take the lead in exiting the market.Through the process of de-capacity and market rebalancing, the industry will gradually return to the rational development track.