Cold water shrimp – status 2016 and expectations for 2017
The cold water shrimp market has been through some ups and downs in the last couple of years with fluctuating prices and inconsistent availability. The increasing prices have reached their peak and have settled at a slightly lower level than last year, but volatility still roams when it comes to supply. As a major player in the market, Royal Greenland has taken some steps to ensure a calmer market for 2017.
In the first quarters of 2016, the market had a pending atmosphere due to high prices and uncertainty regarding future supply and quotas. Consequently, the cautious mood and restraint among purchasers meant that prices saw a slight decrease and producers' stocks of small shrimp began to build up – the larger sizes still in limited supply. This meant that over the course of the year some retailers started to include small shrimp in their assortment as a substitute for the larger ones. Small shrimp have traditionally been sold to industrial customers, but, as they were now sold increasingly in retail, there were no longer enough to cover the demand. In addition, the price of small shrimp had risen to a level that meant that industrial producers of e.g. sandwiches and salads could no longer meet their price points and substituted with other proteins such as surimi, warm water shrimp and seabob shrimp. Now, even though the over-all supply of cold water shrimp is more stable, some industrial producers are still reluctant to return to cold water shrimp due to assumed continued volatility of pricing.
Changing composition of sizes
Throughout 2016, it became clear that the challenges in the market on size composition were not only caused by skews in demand for large/small shrimp, but also reflected that current catch composition. Although catches are generally up (in Greenland), the size composition was not completely as expected, as the sizes were slightly smaller than anticipated.
Adapting to shifting biology
The reason for the changes in size composition of the catch is still a riddle to fishermen and biologists alike. There also seems to be other changes in the seasonality and general lifecycle of North Atlantic shrimp. Category Manager for shrimp at Royal Greenland Henrik Thune Cordsen states: "Traditionally, we have sold a lot of shrimp with orange heads [due to roe] in China for the Chinese New Year, as they are a great delicacy there. However, the catching season for orange-head prawns has now moved slightly and to some degree takes place after the New Year celebration. The shell-changing season has also moved a bit and we are abandoning traditional fishing areas and finding new ones further north." It is unknown whether the shrimp are disappearing from the well-known fishing areas or just relocating and why. It is important to note that while the stocks seem to be moving, the biomass remains stable and strong. Biologists speculate that the changes can be caused by climate change and advancement of other species influencing the shrimp stock, e.g. cod whose favourite prey is shrimp.
Map showing development of catching areas in Greenland
The fact is, that in order to keep the stock under sustainable management both producers and customers have to adapt to these biological changes, both in the way we fish for shrimp, but also in the way they are processed, marketed and used in kitchens.
Calmer seas ahead – taking care of a limited resource
As one of the largest producers of cold water shrimp in the world, we, at Royal Greenland, acknowledge our responsibility for contributing to stabilizing the market both with regards to supply, sustainability and pricing. We seek to uphold this obligation through careful processing with respect for the raw material and allocating product to our regular customers at a price reflecting the level of quality. This way, a limited resource is utilized to the fullest.
Greenlandic biologists from the Institute of Natural Resources have recently published their advice for the shrimp fishery in 2017. On their website (natur.gl) the Institute of Natural Resources states "[…] data from the fishery shows stable catch rates and biological research shows that the amount of shrimp is around the average level of the last 5 years. At the same time, there are less cod eating the shrimp". Based on this advice, The Government have set the 2017 quota for West Greenland at 90,000 T. Slightly higher than in 2016, but a new fishing area in Northern Greenland, which previously only had a trial quota, has been included in the overall quota.
In Canada, the quota took a huge cut of 42% in 2016 due to some unsettling data collected on the stock by biologists. In 2017, quotas are expected to be set at the same level or even lower. With regards to pricing, Greenlandic shrimp are usually valued a little bit higher than Canadian, as Greenlandic shrimp are less sensitive to seasonal fluctuations and supply is thus more stable.