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Coldwater shrimp producers see bright spot in UK market

With long-term demand challenges in key European markets and an erratic supply, the coldwater sector hopes for some much-needed stability.

UK imports of coldwater shrimp are on the rise again, albeit slowly, and industry players hope supply stability will help keep the trend moving.

Norwegian coldwater shrimp producer Stella Polaris Norway CEO Christian Nordahl told IntraFish that, as of now, the picture is bright.

“Demand is in general looking quite good since markets seems to be in good condition,” Nordahl said. “The final Brexit outcome has been an exhausting issue to plan and follow, but so far, is not creating any real difficulties, though the conclusion is not yet set.”

The sales value of coldwater shrimp fell in the UK retail market by 2.1 percent to £163 million (€189.3 million/$212.1 million) in the past 52-week period to March 23, according to Nielsen stats.

Despite being the seventh-most popular species in the market, volumes sold also decreased 6.1 percent to 11,845 metric tons during the period.

According to UK Sea Fish Industry Authority (Seafish) Analyst Suzi Pegg, the species is mostly bought by older and more affluent couples. However, sales went down as prices jumped 4.2 percent to average at £13.77 (€16/$17.90) per kilogram.

Prices and demand for the species fluctuate since supply is inconsistent, and especially since Canada, one of the main suppliers, has reduced harvests and quotas.

Prices, however, are expected to stabalize throughout this harvest season, especially with the Barents Sea supply strong, Denmark-based GEMBA Seafood's Jens Henrik Møller said.

“There might be a slightly downward tendency in the coming month, but the situation is not dramatic,” Moller told IntraFish.

According to Norwegian seafood sales organization Raskfisklaget Marketing Manager Tor-Edgar Ripman, statistics show a strong increase in volumes exported towards the United Kingdom, especially since production from Barents Sea has recovered. The increase could substitute offset the shortfall from Canda following the quota reduction last year, which is expected to persist through this year as well.

New markets, new formats

Scott Nichols, the CEO at Canada-based coldwater supplier M.V. Osprey, told IntraFish he's optimistic about the European market strengthening as the year goes on, but for him and other coldwater suppliers China is becoming an increasingly important market.

"The first quarter is always a challenge in China, our main market, but we expect things to improve in the remaining three quarters this year,” he said.

Companies such as Royal Greenland and Stella Polaris are pushing more into China as well.

“For cooked and peeled, we have some small markets in Asia,” Nordahl said. “As the demand trend for convenience and naturally sourced products rises, we also see an opportunity for our cooked and peeled coldwater prawns in this part of the world.”

In opening up the UK market, a big challenge -- one that has persisted for years -- is how coldwater can emulate or compete with warmwater shrimp.

“We must be more clever and able to differentiate between warm and coldwater qualities,” Nordahl said. “We often talk about the competition from the warmwater shrimps’ sector, but honestly, they seem to be clever in terms of product innovations and new ways of using the species, whereas we are a bit stuck in the more traditional consumer patterns and should do more to be part of the new trends.”

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