12.40
6.80
5.80
0.80
1.20
7.80
8.80
9.00
0.20
0.20
12.40 7.90
7.50
Guides for gutter
8.40
1
Rabobank F&A insights
Lian Heinhuis, Food and Agribusiness Research
Strictly confidential
November 2015
Global Shrimp Aquaculture Industry Dynamics
2 2
Table of contents
Sections
I General outlook: times of supply volatility to persist
II Developments in key import markets
III Analysis of key production regions
IV Challenges
V Opportunities and concluding remarks
23
General outlook: times of supply volatility to persist 1
4
Key observations on the shrimp industry
High supply volatility expected to remain due to recurring disease issues
Re-ranking of leading exporters
Good global demand which is expected to continue
Growing importance of sustainability and certification
Emergence of new business models and a holistic approach to biosecurity
I
II
III
V
IV
Developments in key import markets 2
6
Main export markets stable in volume terms – i.e. consumption per capita is not increasing
Source: Globefish 2015
Shrimp imports in volume by EU countries, USA and Japan
0
200
400
600
800
1000
1200
1400
1600
1800
2009 2010 2011 2012 2013 2014
‘00
0 t
on
ne
EU 28 Extra EU 28 Intra USA Japan
7
But there has been considerable growth in value
Source: Rabobank, FAO 2015
Shrimp imports in value by EU countries, USA and Japan (includes E8 internal trade)
0
2
4
6
8
10
12
14
16
18
2009 2010 2011 2012 2013 2014
bil
lio
n u
sd
EU 28 Extra EU 28 Intra USA Japan
23
Analysis of key production regions 3
9
Total supply of farmed shrimp: tentative growth expected, but low prices will dampen recovery
Source: Rabobank 2015
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F
LAM
Asia
3% 4% 2%
7% 5%
-3% -2%
9%
6%
4%
-5%
0%
5%
10%
2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F
Global farmed shrimp supply
10 29
Bulk of industry is in SE Asia, but highest supply and export growth rate is likely to be outside of this region
91 90
268
355
496 524
India Indonesia
305
67
599
330
650
600
Thailand Viet Nam
16
5
40
55 53 54
87 84 86
Malaysia Myanmar Philippines
88
850
1100
China
2.5 4
40
Australia
25 50
33
74
281
100 118
415
127
Brazil Ecuador Mexico
2000 2012 2020E
Thousands tonnes
11 11
Thailand: a shrimp empire collapsed, but recovery seems on the way
Thai shrimp aquaculture production
Source: Rabobank, based on FAO and other sources 2015
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F
tho
usa
nd
to
nn
es
12 12
EMS TARIFFS TIP
A perfect storm in the Thai shrimp industry
13 13
China: light supply recovery, will not match demand
China: farmed shrimp production
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F
tho
usa
nd
to
nn
es
Source: FAO, Rabobank 2015
14 14
Shrimp demand is strong and is being fulfilled by imports that are much higher than stated in official data
China: shrimp imports and exports in volume (official figures)
0
50
100
150
200
250
300
350
2009 2010 2011 2012 2013 2014
Th
ou
san
d t
on
ne
s
Total Imports Total Exports
Source: Rabobank, Uncomtrade 2015
15
Booming Indian shrimp exports
2008
in order of trade volume
map shows
85% of volume
86% of value
EU (#1)
65,603 tonnes $352 million
USA (#3)
21,538 tonnes $141 million
UAE(#4)
6,837 tonnes $42 million
Japan (#2)
28,815 tonnes $192 million
16
Booming Indian shrimp exports
2013
USA (#1)
82,199 tonnes $1,063 million
EU (#2)
52,780 tonnes $495 million
Japan (#4)
19,793 tonnes $244 million
Vietnam (#3)
33,269 tonnes $366 million
in order of trade volume
map shows
80% of volume
83% of value
17
Exports to US, EU are increasing, but uncertainty remains
Source: Uncommtrade 2015
Indian shrimp exports by volume and value
0
0.5
1
1.5
2
2.5
3
3.5
4
0
50
100
150
200
250
300
350
400
450
2009 2010 2011 2012 2013 2014
Bil
lio
n U
S D
oll
ars
Mil
lio
n K
ilo
s
Processed
Fresh or chilled
Frozen
Trade value
18
Prevalence of EHP is expected to result in a 10-20% decline of farmed shrimp production in India
Source: Seafood Exporters Association of India
Total production of farmed shrimp in India
353
300.05
0
50
100
150
200
250
300
350
400
2014 2015f
Th
ou
san
ds
MT
19
Summary: how long will Asia be the dominant shrimp exporter of the world?
Recovering volumes but just slightly
Costs are still high
New business model needed
Strong domestic demand
Long term net trade position of Asia likely to decline
I
II
III
IV
V
20
Rising Ecuadorian shrimp exports
2008
EU (#1)
72,836 tonnes $390 million
USA (#2)
51,565 tonnes $293 million
Chile (#4)
1,581 tonnes $9 million
Colombia (#3)
1,914 tonnes $5 million
in order of trade volume
map shows
98% of volume
98% of value
Japan (#5)
853 tonnes
$6 million
21
Rising Ecuadorian shrimp exports
2013
EU (#1)
83,376 tonnes $622 million
USA (#2)
73,323 tonnes $631 million
Colombia (#5)
4,609 tonnes $24 million
Vietnam (#3)
37,536 tonnes $301 million
China (#4)
8,173 tonnes $72 million
in order of trade volume
map shows
94% of volume
93% of value
South Korea (#6)
3,976 tonnes $33 million
22
Ecuador is export focused, was the # 1 beneficiary of the disease issues in Asia
Source: Uncommtrade 2014
Ecuadorian shrimp exports by volume and value
0
0.5
1
1.5
2
2.5
3
3.5
4
0
50
100
150
200
250
300
350
400
450
2009 2010 2011 2012 2013 2014
Bil
lio
n U
S D
oll
ars
Mil
lio
n K
ilo
s
Processed
Fresh or chilled
Frozen
Trade value
23
Ecuador’s industry shifts attention to Asia and China and becomes the link between Asian and Western markets
75.47 80.49 89.73 76.56
75.49 65.77
73.81
72.2
24.12 36.89
65.82 118.47
4.83 5.98
14.66
10.48
3.6 1.82
1.89
1.9
0
50
100
150
200
250
300
YTD '12 YTD '13 YTD '14 YTD '15
mil
lio
n l
bs
Europe USA Asia Americas Africa
19.34 23.17
19.51 20.52
18.43 14.97
20.13 16.43
3.87
9.23 10.93
26.69
0.78
1.71
3.6
2.17
0.79
0.62
0.42
0.35
0
10
20
30
40
50
60
70
May-12 May-13 May-14 May-15
mil
lio
n lb
s
Europe USA Asia Americas Africa
Ecuadorian shrimp exports by volume in May (left) and YTD May (right)
Source: Urner Barry 2014
24
Although the latest figures show the pressure on the Ecuadorian industry as a result of recovery in Asia
Source: Central Bank of Ecuador
1.2
1.25
1.3
1.35
1.4
1.45
1.5
1.55
155
160
165
170
175
180
185
190
195
200
2015 2014
Mill
ion
s
Th
ou
san
ds
MT
Volume
Value
YTD shrimp exports Ecuador in volume and value (first 7 months of the year)
25
Brazil: Unfulfilled promise, can this change in the current conditions?
Source: Rabobank 2015
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F
tho
usa
nd
to
nn
es
Brazil shrimp aquaculture
26
Mexico – huge potential but mysteriously stuck by EMS from the other side of the Pacific Ocean
Source: Rabobank, Kontali, Subsecretaría de Pesca
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F
tho
usa
nd
to
nn
es
27
Exchange rates are an important factor for the competitiveness of shrimp producers on global markets
-21%
-6% -5%
-4%
-14%
-44%
-23%
-50%
-45%
-40%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
IDR VND INR CNY THB BRL MXN
2 Y
ear
chan
ge
(dep
reci
atio
n)
agai
nst
US
D
28
LAM summary: potential for further growth
Well positioned region, with low cost
But many challenges, not living up to the potential so far
Ecuador seems unique
LAM growth forecasts are difficult due to the unpredictable situation in Brazil and Mexico
Potentially the most profitable shrimp farming region
I
II
III
IV
V
Challenges 4
30
With the introduction of Vannamei shrimp there was increased growth, but also increased biological risk
Source: Rabobank, FAO 2015
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
‘000 MT of farmed
shrimp
Monodon other Vannamei
Aquaculture starts initially with wild juveniles
Monodon farming drives growth
Global prices high
Vannamei introduction
Industry 400% growth
Shrimp Aquaculture 2.0
1
2
3
Monodon culture faces biological challenges
Cost rise
Other
31 31
Source: Rabobank
Why is shrimp farming a sector with high biological risk especially in Asia?
Trading Feed manufacturing
Fish & shrimp processing
Juveniles
Fish meal and other commodities
Shrimp farming
Fish by-products as input for feed
Typical shrimp farming business model in Asia
32 32
This means a large part of the farming is done by peasant or subsistence farmers
Many shrimp farmers in Asia are
subsistence farmers moving into
shrimp from other agricultural
activities
Experience and knowledge as well
as control at this critical point can
be low
This business model is often
successful for poverty alleviation
but has a higher risk
33 33
It’s the youngest animal protein industry
All shrimp farming is done in developing countries
It’s a tropical species
There are many different business models and sanitary levels neighboring each other
Even with the closed system, farming is still open to the environment
Shrimp is a heavily traded product, even among exporters
….and there are many other factors that cause supply side volatility
1
2
3
4
5
6
Opportunities and concluding remarks 5
35
Opportunities: there is shrimp farming potential also in relatively unexplored regions
Africa Australia Middle East
36
Another opportunity: increased cooperation within the sector to tackle disease issues- like was done in the Chilean salmon industry
37
GSI: a game-changing industry dynamic, tackling the image of salmon farming with NGOs, governments and customers
Source: GSI 2015
• Lower lice levels
• Eliminate escapes
• Reduce environmental impact of farms
Focus on reducing marine ingredients from wild catch fisheries
Source only from sustainable marine ingredients
Biosecurity
Standards
Feed and nutrition
38
Concluding remarks
A period of high supply (and price) volatility is to persist
Asian producers are challenged with biosecurity issues and competitiveness
Future potential growth areas for export are especially in LAM, but also in Australia, Africa
and ME
To ensure sustainability of the industry, cooperation is key
I
II
III
IV
39
Important notice
This presentation has been prepared exclusively for the benefit and internal use of Huon Aquaculture (“Huon Aquaculture” or the “Company”), and does not carry any right of publication or disclosure other than to Huon. Neither this presentation nor
any of its contents may be used for any other purpose without the prior written consent of the Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (“Rabobank”).
The information in this presentation reflects prevailing market conditions and our judgment as of this date, all of which may be subject to change. This presentation is based on public information. The information and opinions contained in this document
have been compiled or arrived at from sources believed to be reliable, but no representation or warranty, express or implied is made as to their accuracy, completeness or correctness. The information and opinions contained in this document are wholly
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