Shrimp
Current market conditions as of 29/05/2025:
The global shrimp market is currently navigating unprecedented structural realignment due to the asymmetric tariff landscape implemented on April 2nd (Ecuador 10%, India 26%, Indonesia 34%, Vietnam 46%), catalyzing significant price appreciation with Asian PND 16-20 vannamei and Latin American 21-25 HLSO experiencing y-o-y increases of 11.7% and 17.2%, respectively. The 90-day tariff extension has provided critical negotiation opportunities, with Indian trade delegations actively engaging in high-level Washington discussions given their strategic position as the dominant US supplier with approximately 40% market share.
US importers have initiated aggressive procurement from all origins ahead of the July 9th deadline, with accelerated order placement to Asian producers despite longer transit times making deadline compliance increasingly uncertain for later shipments. While strategic procurement reallocation toward Ecuadorian origin points continues due to favorable tariff positioning and logistical advantages, Asian packers remain heavily booked with pre-deadline US orders. This intensified procurement activity, coinciding with peak harvest cycles in major production regions, indicates potential oversupply conditions throughout H2 2025 despite current price firmness. While temporary price increases occurred during late March through mid-April due to heightened Chinese purchasing activity, the fundamental production capacity across key supplier nations is expected to outpace demand expectations.
Supply-side indicators remain robust with India entering its peak harvest season (mid-April through June), while Ecuador's geographical competitive advantage facilitates consistent production throughout the calendar year with its five-cycle capacity. Ecuador's infrastructure normalization following previous electricity constraints has further optimized production efficiency metrics. Asian exporters, facing disproportionate tariff exposure, have accelerated portfolio diversification strategies toward alternative destination markets to reduce historical US concentration risk.
The decoupling between accelerated import volumes and demand fundamentals appears increasingly pronounced, with our estimates indicating US per capita consumption regressing to pre-pandemic baseline levels despite frontloading behavior that has effectively compressed several months of anticipated requirements into a condensed procurement window. European market dynamics remain comparatively stable with minimal tariff-related disruption, though exhibiting reduced product availability as exporters prioritize US-bound shipments ahead of potential duty implementation.
Forecasting insight
The near-term outlook for Shrimp prices depends heavily on the US administration's decision on tariffs. Major suppliers from Ecuador, India, Indonesia, and Vietnam, for example, potentially face very different charges. The initial tariffs announced on 2 April varied significantly, and that may remain the case after the 90-day negotiation window expires.
That may impact where prices ultimately peak, but as far as the outlook is concerned, the timing of the peak around Q2 remains the same. This aligns with seasonality patterns for Shrimp from Latin America and Asia. However, that will depend on the timing of any announcements, with a decision at the beginning of July having the potential to push that into early Q3.
In fact, higher tariffs may exacerbate any demand destruction we see as the consumer is sensitive to price increases. So, while that could lead to higher prices in the short term, it may have the opposite impact later on. Different tariff rates could also impact US importers' demand from regional partners, favoring those with the lower rates. Of course, that will depend on how widely they differ.
Another consideration is the economic outlook, with Shrimp prices influenced by the performance of the global economy. We anticipate a recession on the horizon, which will ultimately weigh on demand and Shrimp prices beyond Q2.
Finally, technical indicators are also pointing to prices being at or near a current peak in the second quarter. Tariffs naturally complicate this from an amplitude perspective and, to a lesser extent, even timing, but they shouldn’t fundamentally alter the outlook too much.
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