Globalization of shrimp industry spans Asian, and Central and South America

A Reason for Less “Endless Shrimp”

Apr 30, 2014 • Businesses, Demand, Supply, and Markets, Developing Economies, Economic History, Environment, Government, International Trade and Finance, Labor, Macroeconomic Measurement, Regulation • 279 Views    No Comments

Our Wednesday Environmental Issue

I just read but cannot confirm that in 2011, a Red Lobster employee observed 2 gentleman consuming 782 shrimp during 5.5 hours when Red Lobster had its “Endless Shrimp” promotion. According to a Red Lobster store manager, the restaurant chain offers “Endless Shrimp” every September. With “Early Mortality Syndrome” (EMS) pushing up shrimp prices, I wonder how Red Lobster will respond.

Soaring Shrimp Prices:

Less supply elevates shrimp prices

From: Indexmundi

A bacterial disease that kills shrimp, retards growth and slows reproduction, EMS has affected overcrowded shrimp farms in China, Vietnam, Malaysia, Mexico, and Thailand. As a result, US demand for shrimp from India, Ecuador, and Indonesia has soared. Claiming that these Asian nations and Ecuador are unfairly subsidizing shrimp farmers, US Gulf of Mexico producers received “countervailing duties” from the Department of Commerce but the taxes were reversed by the US International Trade Commission. US producers might appeal.

US Gulf of Mexico Shrimp Industry

From: WSJ

 

Our bottom line: With shrimp and so many other commodities, we have a global supply chain. When disease threatens one link in the chain, higher prices create incentives that bring other worldwide producers into the market. Throw local subsidies and US tariffs into the picture and we can see how globalization interacts with supply and demand.

Sources and Resources: A plethora of fun facts about “Endless Shrimp” that are unverifiable, this shrimp blog was my source. More solid, the articles in industry newsletters, here, here and here, at marketplace.org and in the Wall Street Journal created a complete picture of a shrimp global supply chain.

 

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