Domestic short supply occured in quarter IV of 2020 where businesses ramped up purchasing shrimps for processing in order to fulfill contracts in the run up to Tet Holiday, resulting in a sharp increase in shrimp prices in the last two months.
Võ Văn Phục, General Director of Vinacleanfood, said that the consecutive increase of shrimp prices were attributed to the end of the season and short supply from the Mekong Delta which was partly caused by the COVID-19 pandemic. Not so many farmers enjoy benefits from this increase as it is the end of the season.
As usual, a sharp increase in shrimp prices at the end of the year will help farmers determine an early stocking; however, because prices stayed low at the end of Oct 2020, they hesitated to stock post larvae. Nevertheless, they have kept some ponds or big-scale farms, especially pond-liners where shrimps are reared in 2-3 stages. This will result in a short supply of shrimp material in early 2021 and possible increase in shrimp prices. However, according to businesses, whether or not shrimp prices can stay the same high as the first few months of the year, it depends so much on global supply and demand. And yet, the COVID-19 pandemic has been what matters the most in shrimp importing and producing countries worldwide.
In Phục’s opinion, this year will highlight Vietnam’s shrimp processing as many countries are leaning towards Vietnamese shrimps. However, as some businesses want to speed up their growth, they have focused on selling for the last few months, resulting in a double-digit increase of shrimp prices as compared to October. Businesses without any stockpiles will face a lot of difficulties in fulfilling contracts. With a good forecast, Vinacleanfood has embraced themselves for the situation.
As for large-scale companies, the sharp increase in shrimp prices at this time hardly leaves any impacts on their 2020 production and business plans due to forecasts. However, as for companies already entering into contracts but having no stockpiles, they have to push prices up to assure the quantity and delivery time as contracted. Meanwhile, most big companies have fulfilled their contracts and prepared for new ones which are made upon shrimp prices from quarter IV till now, which won’t cause much affect.
According to statistics by VASEP, most shrimp companies recorded positive business results in the first eleven months of 2020 with increases in both quantity and volume of exported shrimps. The decrease in stockpiles of companies can not be addressed when the shrimp crop almost ends. Low stockpiles, short supply and high demand have resulted in a sharp increase in shrimp prices. In Phục’s opinion, it’s hard to make a forecast on export situation as well as shrimp prices in early 2021 as some countries have kept their restaurants closed in an effort to prevent the COVID-19 pandemic, leaving a possible slump in sales to this channel.