EP 3 | AIRED 10/18/2010

Economic influences putting pressure on world Shrimp and Tilapia markets

October 18, 2010 - Hello and Welcome - My name is Robert Reierson - President & CEO of Tradex Foods. Thank you for joining us for the third edition of The Tradex Foods "3-Minute Market Insight" - The Monday morning “pulse report” for seafood purchasers.

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IN THE NEWS THIS WEEK… - The North American Shrimp market is facing increasing supply pressure. - In Atlantic Canada, stocks are down and the Northwest Atlantic Fisheries Organization has reduced the quotas for Newfoundland & Labrador’s Shrimp fishery. - Total Allowable Catch for the fishery has been reduced from 30,000 tons in 2010 to 19,000 tons in 2011 and 17,000 tons in 2012. - Atlantic Canadian Shrimp fisheries harvest Pandalus Borealis (a large coldwater shrimp species). This product dominates the export market and is primarily sold to European countries. - The quota cuts come at a time when the Gulf oil spill along with production problems in other parts of the world have significantly impacted the world's overall Shrimp supply. - Consequently there is a supply / demand imbalance not only in North America, but also in Europe. - Pandalus jordani, a smaller coldwater Shrimp species harvested in the western United States is a potential alternative product to the eastern Pandalus borealis species - but the western variety is smaller and cannot replace all that is required to meet demand in Europe. - Limited global supply may push prices higher as US buyers compete with European buyers for imported Shrimp products AND are further challenged by a weakening US currency. - Looking forward, buyers of cooked and peeled Shrimp should be prepared for increasing prices. IN OTHER NEWS - the Tilapia market remains tight as current production levels are barely keeping up with demand. - China, the world’s leading Tilapia producer is experiencing production problems for a number of reasons. - First, low prices in 2009 led many producers to reduce production. - Second, cold winter earlier in the year impacted production in southern regions. - Third, the flood disaster in the Hainan Province was detrimental as producers in this region are losing 60-70 percent of their fish due to the flood. - In total, China Tilapia production is down approximately 20 percent this year. - Up until recently, the market was well supplied with 2009 product but this is no longer the case and prices for Tilapia can be expected to rise in the last few months of the year. - It can be expected that frozen wholesale prices may increase by as much as 20 percent - from $2.00/lb in June to as much as $2.40/lb by year’s end. Thank you for joining me for the third edition of The Tradex Foods "3-Minute Market Insight" This is Robert Reierson - “BUY SMART” and “EAT MORE SEAFOOD”

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