Why summer shrimp price should be set at $1.22/lb (which even then may be too low)
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The 2021 summer price of shrimp paid to inshore fishermen — either the FFAW’s proposed $1.22/lb or the $1.10/lb offered by processors — is now in the hands of the province’s price setting panel, which, by law, must choose one or the other.
That’s even if the “right price" is somewhere in the middle, just as the panel wrote in late April when it set the spring price of shrimp at $1/lb (processors’ price) over the FFAW’s $1.50/lb.
The panel system of fish pricing doesn't work in terms of best possible price to harvesters, but that's another story. The panel’s decision on the 2021 summer price of shrimp is expected next week.
It’s surprising that prices are so low, but shrimp hasn’t behaved like snow crab ($7.53/lb) or lobster ($6.97/lb), which are at record highs.
The Gulf shrimp fleet (fishing zone 4R) wouldn’t untie for $1/lb, although some shrimpers from the northeast coast (fishing zone 3K) have gone fishing in the past week. The $1/lb spring price of shrimp is a decline from 2020’s high of $1.18/lb, and 2019’s near record high of $1.78/lb.
My bet is that the panel goes with $1.22/lb (even that could be ridiculously low).
Canadian cold-water shrimp producers may have a competitive advantage this year with shrimp going into the United Kingdom (one of its biggest markets) over shrimp from Greenland — its main competitor.
While Canada has signed a post-Brexit deal with the UK, which will mean the continuation of tariff-free access, Greenland apparently has yet to sign an agreement, and has reportedly been "begging for one.
If it doesn’t get a deal, Greenland producers will be subject to a 20% tariff, which will give a “significant edge” to Newfoundland processors.
Some market reports have speculated that any recovery in shrimp prices will be dependent on the level of re-opening after the pandemic is controlled, especially in the UK.
But the UK economy is performing stronger than expected, and shrimp demand may increase dramatically.
European cold-water shrimp prices were expected to keep rising into the summer, and trade data has shown the UK has cut cold-water shrimp imports.
Gemba seafood Consulting has predicted that UK demand “will likely take up speed in the second quarter, and will hence improve the global demand which may lead to increasing prices later in the year.”
We shall soon see.
Ryan Cleary,
SEA-NL