Ecuadorian Shrimp Export Encountered Challenges: Declining Demand and Price Fluctuation in China

Since the National Day holiday in 2024, Ecuadorian shrimp exporters have faced unprecedented challenges in the China market.The change was largely due to weak consumer spending caused by deflation in China, which in turn affected demand for imported frozen shrimp.According to industry observers, the volatility in the China market has had a profound impact on Ecuador's shrimp industry.

Looking back at the first half of this year, Ecuadorian shrimp packers 'export prices to the China market remained relatively stable.However, shrimp prices have risen sharply since the Shanghai Seafood Show at the end of August.In just two months, the price of a kilogram of shrimp has risen by more than $1.00, a sharp blow to Ecuadorian exporters who rely on the China market.

Ecuador said a cold winter and an energy crisis were the main reasons for the decline in shrimp production.However, China importers disagree.They argue that Ecuadorian sellers lack in-depth understanding of the actual situation in China's economy and fail to accurately judge the current trend of consumer spending.This information asymmetry has led to large fluctuations in the price of shrimp, which has brought considerable losses to both sides.

Chinese aquatic industry experts pointed out that the recent short-term rise in Ecuadorian shrimp prices is mainly due to China's low inventory levels.Especially before August, due to strong market demand, China's market inventories once fell to low levels.However, as the Chinese New Year approaches and wholesalers start stocking up for the holiday season, China's inventory levels are expected to increase in the coming months.The change could have a further impact on the export price of Ecuadorian shrimp.

Although Ecuadorian shrimp prices in the China wholesale market have risen less than those of Latin American exporters, importers in Shanghai have expressed concern.They point out that only old inventory bought at a low price is profitable, and inventory bought at a high price is now hard to sell at a premium.The woes have led importers to become more cautious in their purchasing strategies in the coming months to avoid losses due to excessive inventory build-up.

At the same time, China's domestic live shrimp market is facing a similar dilemma.Due to weak holiday consumption, diseases and oversupply and other factors, domestic live shrimp prices continue to be depressed.This trend is undoubtedly an additional pressure on imported frozen shrimp dealers.They need to cope with fierce competition and price volatility in the domestic market while maintaining market share.