The monthly average price of Indian whiteleg prawns (60-count) fell by INR 16.0/kg (-5.5%) month-on-month (m-o-m) and, more substantially, by INR 82.0/kg (-23.0%) year-on-year (y-o-y), in December 2022 to an 18-month low of INR 275.0/kg. The lower respective prices are being largely attributed to seasonally weak demand for Indian prawns from key export customers in the North American market. This is mainly due to strong global competition, particularly from Ecuador, which continues to expand its international footprint through technological innovation and strong economies of scale. Ecuadorean producers have significant cost and logistical advantages over Indian producers when it comes to supplying the Americas, which has contributed to rising Indian prawn inventories. The Indian market is insufficiently sized to absorb the extra volume, and also faces strong competition from Thailand and Vietnam for the Chinese market.
The monthly average price of Ecuadorean prawns (60-70 count) fell by USD 0.04/kg (-1.5%) m-o-m in December 2022, to a 29-month low of USD 2.60/kg, which also represented a reduction of USD 0.78/kg (-23.1%) y-o-y. Despite Ecuador’s comparative advantage in supplying the Americas, a weakening USD, alongside slowing economic activity and falling energy prices, weighed on US prawn imports, for both retail and foodservice channels. Ecuador continues to benefit from favourable climatic conditions, allowing three harvests per year, in comparison to rival producers that have one or two harvests. It is estimated that Ecuador produced in excess of 1 million tonnes of whiteleg prawns in 2022, up from approximately 0.8 million tonnes in 2021. This continued expansion presents a bearish global backdrop, through an increasingly competitive marketplace, presenting a considerable threat to Indian prawn producers. In this context, various degrees of global industry consolidation, rationalisation and innovation are anticipated through the 2023 calendar year.
