As a complete aside, please find this short article on Shrimp recipes in the New York Times. For those heavily invested in Avanti, the first sentence may warm your hearts, even if the recipes won’t!!
http://www.nytimes.com/interactive/2013/10/06/magazine/06-bittman-shrimp.html?hpw&_r=0
Thanks Samir :-). Loved all of it.
Thailand, Ecuador, Indonesia, Vietnam - are the main countries to focus on for checking on revival of shrimp farming/production and local pricing.
For US Market - We need to track imports, reigning prices, anti-dumping duties per country,etc.
http://www.shrimpnews.com/FreeReportsFolder/NewsReportsFolder/USADCshrimppricesIQF9-26-13.html
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September 20, 2013 |
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United States Washington, DCâNo Subsidy Duties! This morning, Monday, September 20, 2013, 4 of the 6International Trade Commissionersvoted to throw out the shrimp subsidy case, based on the fact that injury to the domestic industry was not proven. Ecuador, China, India, Malaysia and Vietnam will not have to pay any duties. The subsidy case on shrimp is dead! Source:Seafood.com(an online, subscription-based, fisheries news service). Editor and Publisher, John Sackton (phone 1-781-861-1441, emailjsackton@seafood.com). ITC Throws Out Shrimp Countervailing Duties. John Sackton. September 20, 2013. So, What about Indonesia - CVD duties are still ON? |
US Customs applied countervailing duties (CVD) on frozen warmwater shrimp from seven producing and exporting countries (Ecuador, Indonesia, Thailand, Viet Nam, China, India and Malaysia). Looks like Thailand & Indonesia CVD duties still remain.
CVD has been lifted on imports fromEcuador, China, India, Malaysia and Vietnam.
Malaysia is the country, wherea 62.74% tariff was applied andreally affected imports into US. So we may now see Malaysia springing back into Shrimp Exports to US.
Next highest CVD duty on Vietnam was 6.07%. Evn if that continues that may not be that much as dampner, as it will be perhaps for Indonesia.
Even though USDA website is down, post US shutdown - thanks to Kiran’s resourcefulness/Google Cache we could go to the data source 
directly and we have more fine-grained data - particluarly useful is the full year 2012 data in comparision with half year 2012/13
Thanks Kiran!
For those interested, enclosed Excel has complete data on US Shrimp Imports 2007-onward for all the countries.
US_SHRIMP_IMPORTS.xlsx (16 KB)
Here's a preview on the more fine-grained picture
| Country | 2012 ('000 Pounds) | Jan-July 2012 ('000 Pounds) | Jan-July 2013 ('000 Pounds) | Change ('000 Pounds) | Percent Change | Anti-Dumping Duty | Other Comments |
| Thailand | 300006 | 161110 | 102681 | -58429 | -36% | Y | |
| Equador | 178934 | 114287 | 101042 | -13245 | -12% | N | |
| Indonesia | 163312 | 94859 | 93578 | -1281 | -1% | N | |
| India | 145418 | 58051 | 97923 | 39872 | 69% | N | |
| Vietnam | 90725 | 46226 | 54336 | 8110 | 18% | N | |
| China | 78576 | 41464 | 41207 | -257 | -1% | N | |
| Mexico | 57556 | 25647 | 17664 | -7983 | -31% | N | |
| Other | 162033 | 88371 | 72990 | -15381 | -17% | ? | |
| Total | 1176560 | 630015 | 581421 | -48594 | -8% |
Some of the US Govt sites are back!This one is good to track.
<http://www.st.nmfs.noaa.gov/st1/market_news/>
<http://www.st.nmfs.noaa.gov/st1/market_news/doc22.txt>. Has the following details
SHRIMP(PEELED & DEVEINED):
BLOCKS:
INDIA: WHITE TAIL-ON (farm): Un/15 $10.25, 21/25 $8.25, 26/30 $7.60.
PERU: WHITE: (farm):31/35 $7.10, 36/40 $6.50, 41/50 $6.00.
INDONESIA:WHITE (vannamei)(TAIL ON): 16/20 $8.75, 21/25 $7.45, 26/30 $6.75, 31/40
$6.35, 41/50 $5.65.
INDONESIA:WHITE: (TAIL-OFF) 31/40 $6.65, 51/60 $5.25, 61/70 $5.15, 71/90 $5.10, 91/110
$4.55.
VIETNAM:BLACK TIGER(TAIL-ON): Un/12 $12.00. (TAIL-OFF): 16/20 $8.50.
IQF:
CENTRAL & SOUTH AMERICA: WHITE(TAIL ON)(farm): 21/25 $9.90, 26/30 $9.10, 31/35
$7.80, 41/50 $6.35. WHITE(TAIL OFF)(farm): 21/25 $10.15, 26/30 $9.25, 31/35 $7.35, 36/40
$7.30, 41/50 $6.85, 51/60 $6.40, 71/90 $5.45.
THAILAND:WHITE(TAIL-ON): Un/15 $8.90, 16/20 $7.75, 21/25 $6.75, 26/30 $6.65, 31/35
$6.10, 36/40 $6.00.Nellore Field Visit Report I|
**Shrimp Processor Feedback/discussions|**16 Oct 2012
1). Industry is in a better position today with Vannamei, as compared to Black Tiger
2). Industry bodies like MPEDA and Coastal Aquaculture have played a role in ensuring systems & processes. One can say this industry is slightly better regulated than some of the others because of these efforts
3). All hatcheries have to registered. Any hatchery providing seeds to farmers have to import broodstock from approved sources. The whole import is quarantined by Coastal Aquaculture Agency and tested for disease before release. Recently Agency has increased quarantine capacity significantly - but even that is proving short of what is needed
4). Traceability - to farmer - batch - seed - hatchery exists but take it with a pinch of salt!
5). His turnover 250 Cr ~5000 MT last year or ~500/kg. Avanti is the only listed player.Shrimp Processing industry in India is dominated by family owned businesses - all unlisted. There are 5-6 big players like Devis foods with 500-600 Cr turnover. One in Mumbai and one in TN, rest in AP.
6). We/most big players have been in this business for 15-20 years. Export relationships exist. There are intermediary agencies that get us the business.Processors from AP mostly have been exporting to US. Some TN processors have been exporting to EU.
7). Challenges - Disease and Market price. Yes disease is less of a challenge today, market price is a bigger problem
8). Stable prices are better for us than rapidly changing/rising prices. It affects demand/supply equations and availability. Rising prices has not meant margin pressures for us
9.Importers have started deferring purchases now that main buying for Xmas season is over - they usually have to buy 3-4 months in advance.Restaurants have started changing menus from Shrimp due to the very high prices.Prices have already started falling from this month.Next buying season is for Lent period in Mar - so we may see buying resume again in Nov/Dec
10). Prices are expected to correct significantly before the year ends. It may revert to $4 (per pound) levels which was the normal level earlier. Do not think it will go lower than that. $4 levels is very much sustainable for the industry
Tirumal and Omprakash - Kindly check if I have missed reporting anything important/errors in the data
Nellore Field Visit Report II|
**Shrimp Farmer Feedback/discussions|**16 Oct 2012
12 x 2.5 Acre (1 hectare) farms on lease - well developed, neatly laid out high-grounds. Brackish water pumped from Canals (sea is just next door, but no problems of flooding ever in his farms because of high grounds. Industrial power @ industrial rates. Genset incase no power (which is not so common). 6 Farms currently in-use. Another 6 for 2nd crop. He has farms in his native village also. He also buys produce from other farmers for supply to processors - where he makes 3-4 Rs/kg. One of the big suppliers in Nellore region
1). Last 4 years have been golden years for aquaculture Farmers.
2). Summer months May-Jun-July are the peak season. Every farmer goes for the highest produce during summer months - for which seeds put in Feb, latest March - so these can be harvested starting May. We start harvesting at 90-100 days (60 count), 100-110 days (50 Count), 110-120 days (40 count). Payment rates are as per size(count).
3). Summer months -Yields are higher, diseases are rare. Most farmers get good first crop. Post peak season farmers tend to invest less. Only few farmers take the same risks with 2nd crop. I took the risk last year, and there were some problems. I took the risk this year again and I have benefited. Before putting in 2nd crop, pond has to be dried completely - so any bacteria/problems are eradicated. But some people taking shortcuts - because the price is very good this year.
4). This size that you are seeing in this pond - I have seeded in July. They will be ready in another 2 weeks. After that I will seed the another 2 Mn seeds in other 6 ponds.
5). Peak Season - most big processors handle ~40T/day. Aug-Sep-Oct ~20T/day. This year they are expecting again more in Nov-Dec -~20T/day. Jan-Feb will be less. Peak season we get lower rates. Every year prices rise only after peak season is over!! Market always knows about supply glut.
6). Peak season rates we got - 220/kg. This year was special - Aug - we got 400-500/kg. Sep - 600/kg. Oct - 530/kg. We are making 3x normal years. With this kind of return, farmers will now invest for next 4 crops atleast
7). Rs. 200/kg is what makes it viable for any farmer (leased farms). And is happy with 250/kg rs 50 more/kg). If farm is his own, he is okay even with 160/kg. Leased land rates (paid for full year in advance) is ~18000/acre. Seeing attractive end-prices, there are some who have taken leases even 60000/acre recently.
8). 40% of aquaculture farmers are like me. They don’t know anything else to do. We keep doing aquafarming year after year. Been at this from 1995. When prices rise the other 60% farmers get attracted and come in. Last 4 years have been golden years.
9). You have already seen 4 good years. How long can/will this sustain? - We think next 4-5 years we will have good crops without much problems
10). in these farms I use Grobest -Thai product. Other Farm I use CP. Along with Grobest Feed I use Supplements from CP. CP, Avanti and Grobest are top 3 Feeds - all same quality - good FCR.
Tirumal and Omprakash - Kindly check if I have missed reporting anything important/errors in the data/info
Hi Donald,
Is there been any impact of the Phailin on shrimp farming ?
Regards
No impact on Andhra Farms. Some farms in Orissa have been flooded.
nothing Major, Andhra supplies 80% to USA.Gujarat supplies 80% to EU.West Bengal and Tamil Nadu supplies 80% to Asia/china.
Top 3 players i in feed in Andhra are Avanthi,CP,Waterbase.
expecting price to come down to $4 in next 3-4 months.
Thanks a lot team Hyderabad for the groundwork you guys are doing. Very few people are able to do these works…these things go a long way in building knowledge and conviction. Thanks.
Any idea about the margins these guys make in the processing segment? Also, is it that major global cos prefer to buy from organised players? What is the capital cost for a 5000 tn capacity?
Thanks & Regards,
Ayush
Nellore Field Visit Report III|
**Shrimp Feed Distributor Feedback/discussions|**16 Oct 2012
Nellore region biggest distributor for Avanti. Has been with them for over 15 years. Turnover ~20 Cr today up from 3-4 Cr a few years back.
1). Farmer requires 4T Feed/acre @ 60K/T or 2.4 lakh per acre
2). He needs to add supplements @30K/acre; Supplements like Vitamin C, etc total about 10-12% of Feed Sales
3). His annual Sales are ~5000T for the year. J-F-M =500T, A-M-J = 2000T, J-A-S = 800-1000T, O-N-D = 1500T
4). Every year Feed manufacturers have been hiking prices in tandem with RM rise. Last year we sold Feed at and average ~56.8/Kg. This year we have sold at 62.8/Kg till Oct. Usually the 3 big feed manufacturers CP, Avanti, Grobest all hike prices in a co-ordinated manner.
5). Credit:Cash Sales to farmers is in 70:30 ratio. We usually extend more credit in 2nd half of crop after first 60 days, when the crop has matured and disease/other risk is low/nil
6). To Avanti we provide 90% Cash advance which provides us higher margins, turnover discounts, etc. Only around 10% is on Credit terms with the company.
7). Like CP and others,Avanti has started providing supplements . These are AvantBact, AvantProW, Avant Immunopak and Avant Amonisup. These are billed separately to Srinivasa Cystine company Ltd.
8). Farmers have made 3-4x the money this year. Because of a bumper year this year, they have the firepower to continue investing in aquaculture for next 3-4 crop seasons.
9). Avanti Feeds is a good ethical company. Transactions are always fair and transparent. We have grown with the company and have lot of respect for them.
10). Business has been good. We expect the good times to last for next 4-5 years easily
Tirumal and Omprakash - Kindly check if I have missed reporting anything important/errors in the data
Just want to put on record - appreciation for Team Hyderabad - as always it was a pleasure to work alongside them. Every little logistical thing was taken care of smoothly and as usual we got to meet some of the best folks in the business. Extracted the most in the shortest possible time of some ~6 hours!
Seeing the processing plant and the shrimp farm in action - was a real pleasure. I can’t decide what I enjoy more - the management Q&As or these field trips
Thanks Team Hyderabad for making this happen. Has gone a long away in instilling more confidence in this business/industry prospects.
Over to others tracking/invested in Avanti Feeds. Let’s have comments coming in. What do you make of the whole story now that we have more insights? Couple of things to catch in the field reports, by the way, Please give a good read!!
I will try and come back NOW with some numbers. Kiran, this may be a good time to estimate forward projections.
Some data to chew on
| Avanti Feed | Q1 | Q2 | Q3 | Q4 | FY12 |
| Feed Sales | 80.63 | 74.82 | 56.27 | 59.77 | 271.49 |
| Feed MT | 18657 | 17312 | 13020 | 13830 | 62819 |
| Avg Feed/MT | 43.22 | 43.22 | 43.22 | 43.22 | 43.22 |
| 1H Feed/Year | 57% | ||||
| Shrimp Sales | 31.75 | 48.84 | 20.66 | 18.51 | 119.76 |
| Shrimp MT | 521 | 802 | 339 | 304 | 1966 |
| Avg Shrimp/MT | 609.16 | 609.16 | 609.16 | 609.16 | 609.16 |
| 1H Shrimp/year | 67% |
| Avanti Feed | Q1 | Q2 | Q3 | Q4 | FY13 |
| Feed Sales | 147.32 | 136 | 94 | 124 | 501.32 |
| Feed MT | 31098 | 28708 | 19843 | 26175 | 105824 |
| Avg Feed/MT | 47.37 | 47.37 | 47.37 | 47.37 | 47.37 |
| 1H Feed/Year | 57% | ||||
| Shrimp Sales | 11.51 | 54 | 45 | 34 | 144.51 |
| Shrimp MT | 216 | 1014 | 845 | 638 | 2713 |
| Avg Shrimp/MT | 532.65 | 532.65 | 532.65 | 532.65 | 532.65 |
| 1H Shrimp/year | 45% |
Few things to notice
1). Feed Sales ; There is always a progressive decline Q1 to Q2 to Q3, and a revival in Q4. This is in line with the Summer to Winter months and farmers taking less risk in non-summer months inputs.
2). Shrimp Sales: Q2 is the best qtr, but I suspect that is more to do with the yearly expansion coming to peak utilisation by Q2. Remember in FY12, production increased only modestly from ~1400 Mt to ~1900 MT, but in FY13 it leaped to ~2700 MT
This year annual Feed capacity was guided by Management to ~125-130,000 MT whereas Shrimp processing was guided at ~6000 MT.
Shrimp Feed realisation this year is upwards of Rs 55/kg. But what is a realistic shrimp processing realisation average for the year. Prices doubling and coming down to again $4 by end year may imply an average of $6 for the year or $12 per kg or say 720/kg
What is a good conservative figure - 680/Kg?
Hi Donald,
Volume on this stock is extremely low. Till 10:45 AM in morning volume was 10. Does this signal any problem?
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I am assuming the date is 16 Oct 2013.
Nellore III|
**Shrimp Feed Distributor Feedback/discussions|**16 Oct 2012
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