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Eager EU buyers send black tiger shrimp prices 'sky high’

But how long will they be willing to pay the premium?

Prices of black tigers are still soaring, as they have been in recent years, as a significant lack of product takes its toll on the industry.

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Buyers in traditional EU markets continue to be willing to pay, but a question mark hangs over how long this will continue, Heiko Lenk, CEO at Bangkok-headquartered Lenk Frozen Foods Asia, told IntraFish.

"Nowadays, black tiger prices are sky high and I don’t see any scope as to why they would come down,” he said.

Compared with five years ago, around 80 percent of the aquaculture area once dedicated to black tiger farming, mainly in India and Vietnam, has today switched to vannamei.

“Black tiger has practically disappeared,” said Lenk.

“So this has caused a big lack of product, and this year I think you can say now black tiger changed from a commodity to be a real speciality.”

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The price gap between vannamei and black tiger is now huge with some sizes fetching as much as 50 percent more on average, according to Lenk.

Around 70 percent of Lenk’s business is black tiger shrimp, predominantly in foodservice, but the high prices are not putting him off. Just the opposite.

“The more complicated black tiger becomes as a business the more we specialize on it,” he said. "In the future black tiger will come back, as farmers are bound to be motivated by these good prices."

How long can it last?

According to Lenk, the traditional buyers in the EU are still quite happy to pay the higher prices for black tiger -- which mainly goes into the foodservice sector rather than retail -- but the concern is how much longer they can afford it.

“But we see in Germany and the North European market, the traditional black tiger buyers so far don’t give us any sign they will switch to the vannamei,” said Lenk.

“Maybe the Chinese restaurant business is jumping on the cheaper species, but European buyers still want black tiger.”

Over the years farmers have switched across to vannamei because the species offers higher densities, less disease, and one additional crop a year.

“So it is bigger volumes, and the factories are also happy with vannamei, as they get to move bigger volumes," he said.

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Also, with vannamei so abundant, black tiger -- only grown in any serious volume on farms in Vietnam, and in Bangladesh -- has gained cachet.

Bangladesh is the only country focused entirely on black tiger shrimp production, and it is fast attracting new customers.

For example, Japanese are coming in to buy middle counts, and even US buyers are coming back to Bangladesh, said Lenk.

This has caused additional strong demand in Bangladesh for the limited material.

“We will have to see how this will be sustained and how long buyers will accept these kind of prices,” said Lenk. 

“I personally think prices here will remain high. There is always a market which will appreciate this kind of shrimp and willing to pay this price.”

Vannamei outlook still uncertain

For vannamei prices, the outlook for now is still uncertain, but if they come down further it will make the price gap even bigger, and only put more pressure on black tiger.

“Certain markets they are willing to pay a little more for black tiger, but if the gap is more than a $1 (€0.93) people tend to switch down,” Adriaan de Leeuw, managing director at Belgian shrimp importer and exporter Solea International, told IntraFish.

“Last year the gap was larger than a dollar -- at around $1.50 to $2 (€1.40-€1.87) or even more for certain sizes -- but suppliers couldn’t sell the product.”

In the end they had to drop prices. In general black tiger has to follow vannamei prices and availability, said De Leeuw.

Jiro Takeuchi, director of Bonmea Finest Foods, told IntraFish the black tiger market was more interesting “as for sure, prices will remain strong."

Bangladesh is starting its first harvests of the year and promising to get a good season both in volumes and prices, he said.

“It will be a challenge to secure volumes against Vietnam (aka China) and Japan who are already showing strong demand," he said.

While in Vietnam there are also talks of an expected increase of black tiger volumes, huge growth is unlikely compared with intensive vannamei farming.

“So overall, I still see a shortage of this species in general and strong prices going forward,” said Takeuchi.

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In addition to black tiger, Argentinean red shrimp is also picking up pace in the EU market, according to De Leew and Takeuchi.

"Customers looking for larger shrimps will have to pay the price on anything but HOSO [head on, shell on]," said Takeuchi. "For the HOSO, then we see more and more Argentina shrimp for the last three years taking over new segments of the markets."

And Solea International is one such company “active” with Argentinean red shrimp.

“We see huge demand in our markets -- Belgium, Netherlands, France, Germany, and of course south European countries,” said De Leew.

But it is a niche product, he said, and always will be. It is wild caught and there is only around 120,000 to 150,000 metric tons available.

“It is working on getting MSC assessment within 12-18 months, so this is new and interesting.”

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