Global production growth outpaces demand, pressures US shrimp prices

US shrimp prices remained under pressure as a prolonged imbalance between global supply growth and demand continued to weigh on the market, according to industry participants.

Platts, part of S&P Global Energy, assessed peeled deveined tail-on 16/20 count shrimp at $4.20/pound May 29, down 10 cents/lb from the beginning of the month. Sources said ample inventories, cautious purchasing activity, and expanding global supplies have continued to pressure values.

At the same time, major producing countries such as Ecuador and India continued to expand output, contributing to a supply environment that many participants said has outpaced consumption growth.

"The market is difficult because it's not only about selling, but also managing tariffs and uncertainty," one importer said. He added that Ecuador continued to increase production, while India has returned to stronger output levels after a period of slowed production due to increased tariffs up to 50%, creating additional supply pressure.

The imbalance has occurred even as Ecuador diversified export destinations. Faced with subdued US demand, Ecuadorean exporters have increasingly focused on growth opportunities in China and Europe. While those markets have absorbed additional volumes, industry participants said the shift has not been sufficient to offset the broader increase in global production.

Several factors have contributed to slower US demand growth.

During the recent inflationary cycle, consumers increasingly turned to lower-cost proteins such as poultry and beef, limiting seafood consumption. While inflation has begun to moderate and consumer purchasing power has improved, shrimp demand has not recovered at the pace many market participants expected.

One importer said many consumers continued to view shrimp and seafood as expensive, despite current retail prices often being comparable to those of competing proteins. For example, he noted that a two-pound bag of shrimp purchased at a warehouse retailer can cost $20-$21, while several beef steaks may cost four times as much.

According to the source, shrimp offers significant value per serving, yet consumers continue to associate seafood with higher prices.

Platts assessed PDTO 16/20 count shrimp at $4.20/lb CIF New York, on June 8, steady from the end of May.