China, as the main purchaser of shrimp from Ecuador, plays a pivotal role in determining the market price. This relationship means that when demand from China is strong, the price of Ecuadorian shrimp rises, and conversely, when demand is weak, the price decreases.
In May, Chinese buyers decided to suspend their shrimp purchases due to the high prices, triggering a downward trend in the market. This decline was further intensified by economic uncertainties and stock variations in both Europe and the USA, leading to a broader reduction in demand.
The price decrease was sharper than what Chinese buyers had expected, resulting in a drop in their interest to buy. It’s important to note that Chinese buyers tend to participate in the market when the prices are climbing rather than falling.
Currently, China has a considerable inventory of shrimp, and the selling price in its local market is dwindling. This situation has caused some importers to suffer losses upon selling their shrimp.
Given the current economic scenario, Chinese importers are focusing on maintaining their cash flow. Unlike in the past when they would hold on to their shrimp inventory waiting for a price increase, they are now selling more quickly, further pushing the price down.
In the upcoming months, the local shrimp season in China during June, July, and August will significantly shape the market trends. The demand for imported shrimp will largely depend on the success of the local shrimp season during this period.
The primary uncertainty that remains is whether the price will continue its downward trajectory and stabilize, or if it will rebound. Providing a definitive answer to this is challenging due to the unpredictable nature of the shrimp industry. Various factors like weather conditions, availability of local shrimp, and demand for imported shrimp all play a role in the outcome. Ultimately, time will reveal the future direction of shrimp prices.