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Image: Rubén Celaya, CEO of Marítima Austral Krusta Group / Revista Puerto / FIS
Shrimp: 'The problem is in Spain'
(SPAIN, 10/9/2023)
In the shrimp sector there are businessmen who, due to their knowledge and experience, are listened to carefully. One of them is Rubén Celaya, CEO of Marítima Austral (KrustaGroup). His vision of his business is not always the same as that of his colleagues and precisely for this reason, because he notices points that others do not, his point of view is always interesting.
Rubén Celaya, an undisputed reference in the shrimp freezing sector, gives his vision of the current situation of the sector, but it is not the change in consumer habits that worries him the most, but rather the national macroeconomic situation and a dependence on the Spanish market that has led the price of this premium product to its lowest floor. He believes that it will be very difficult to generate the changes in capture and production that the market is requiring and that companies will not be able to endure more years of losing money, which is why he considers the adjustment of the exchange rate a priority and unavoidable need for the next government. On the other hand, he raises the tariff differences between farmed shrimp from Ecuador and wild and natural shrimp from Argentina, an unfair competition that must be fought.
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Source: Stockfile FIS
“I see a very worrying scenario but not because of a fishing issue. The market is not in the best moment, that is clear, there are problems, but Argentina has a problem that is only Argentina, which makes the situation difficult for any exporter, not just fishing. The problem is the currency. It is impossible for a country that is fictitiously generating inflation in dollars every year, being an exporter is very difficult, it must be the only country in which there is inflation in dollars, greater than the inflation of that currency itself, we are in an inflation of 40 percent, how to do it,” says Celaya as a summary and introduction to this interview about the current situation of the shrimp sector in Argentina.
REVISTA PUERTO: How can the sector improve its situation under these conditions?
RUBEN CELAYA: In good fishing times when the gross margin is large, these financial inefficiencies can be covered up. Going from having 30 percent profitability to having 10 percent is not the same as going from ten to minus ten. John Ford said that a company was fantastic if it spent a dollar less than it billed and it was horrible if it spent a dollar more than it billed. This is the same thing, inefficiencies at a time where the margin is not great kill you. Looking only at the business, the cost of fishing, the sale and such, we would not be in for great joy, but we could be fair; but the currency kills you. How many years can you be losing money? It's very difficult, you have to wait for something to change. We were in a very similar moment before Macri came to government, not because it was Macri but because at that moment there was a change, the dollar was released and it gave us a push, a little air when we were all with the noose around our necks.
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RP: It's what everyone expects to happen after the elections.
RC: It is expected because it is what has to happen, no matter who wins, because if not the problem will be of unsolvable dimensions, because it cannot be done anymore. There is no room to take more from this sector, thirty years ago yes, not today. Neither for them to take away your taxes, nor for them to take away your exchange rate, for them to take anything away from you, the commercial margin that shrimp gives is enough to wait for the market to improve and survive and endure. This is quite obvious, he who does not see it is because he does not want to.
RP: Moving away from Argentina, in Spain the commercial situation of frozen shrimp also appears complicated. What can happen to the Spanish market?
RC: The problem with the Spanish market for me is that there is too much Argentine shrimp because there are no other destinations large enough to be able to derive what should be derived. The problem is that as too much enters, it generates enormous downward price tension. For example, Japan does not have downward price pressure, but since Spain sets the price, although the market has nothing to do with it, the buyer looks to see if you are selling for six in Spain and then they pay that, or six and ten, but no more, even if its market allowed it. There is a lot of shrimp in Spain and also with changes in the way we eat...
RP: It is something that has been made clear at the FAO Congress, the Spanish consumer is no longer the same and they no longer buy two kilo boxes.
RC: You have published that in Mercadona, which is the chain in Spain that sells the most, they are changing their plans and sell it by units. This marks the change in trend, young people eat in a different way, they prepare less and that greatly affects a product like shrimp.
RP: Will the sector have to reinvent itself?
RC: Possibly. In fact, the issue of changing formats is no longer new; many companies already began a while ago to make more products for the gondola and less for the fishmonger. The little box of 400 grams, 800 grams, smaller formats. It is not the majority yet, but work will continue there. What happens is that the market will have to pay for it because if it is not a problem, because that is an additional cost increase. At the moment what is clear is how the cost is increased, what is not clear is how the price is increased. It's not easy, but it will work out.
RP: Can the sector face this situation if it does not unite?
RC: One of the big problems we have in the sector, in Argentina in particular, is precisely that: the lack of unity and judgment among all shipowners. I'm not saying to create an oligopoly, but to agree on criteria, at least on what is important, even if we later have differences; It is impossible, we have never been able to. This is very bad because everyone goes their own way, at times when you need liquidity everyone sells as best they can and that destroys everyone else, meanwhile the demand is sitting laughing, waiting to see what happens.
Source: KrustaGroup -->
RP: Well, when the issue of whether or not to catch shrimp in the north was raised, two large Mar del Plata companies like Solimeno and Moscuzza, interested in fishing, pointed out that the volumes they handle could not alter the price.
RC: Of course they can, of course it goes down. Not forty years ago, today when information flies yes, within thirty seconds we all know what price everyone sold at and the buyers, who do nothing but listen, are perfectly aware. Today you invoice fifteen kilos of shrimp and in the afternoon all of Italy knows about it and it ends up giving you a tool to negotiate you down.
RP: Are these changes in the market going to require a change in the way we fish and produce?
RC: I'm not sure, it should be like that because it would be the most efficient and the most efficient would be to do it on board, but I'm afraid it's impossible because it complicates the boat a lot. To begin with, we have to do much less production, we cannot catch what we catch today to make those formats and then there will be the unions, because surely, even if they do less, they will want to be paid the same. I don't see it as easy, it is done in other places, but in Argentina it will be complicated, it will be a process that will have to be done abroad and I don't see it as easy either. There are already those who are doing it in China and it pays, it seems irrational, but it pays, we have never done it, but there are those who do it and if they do it it will be because they are given the number. Unload, send to China, process, another freight to Europe and then to Spain or wherever; They are not large volumes, but they do it, a lot of Argentine shrimp processed in China enters Italy.
RP: How much would it help to have commercial agreements?
<-- Source: KrustaGroup. Clic on the image to enlarge
RC: It would be very important in terms of tariffs. In the case of the Argentine shrimp we have the perfect example, which is the vannamei, which does have a tariff agreement with Europe and is a bug that competes directly with the Argentine shrimp, something incomprehensible because it is a plastic log with a wonderful resource like ours, but compete in the market; by appearance or whatever is competition. Now, we pay a 12% tariff, not having it changes your life. It is very unfair that vannamei does not pay tariffs and Argentine shrimp does, I think this could even be considered illegal because it is absolutely unfair competition. This is very important to change, that they give it to us or that they take it away from them, what cannot happen is that one does and the other does not, because the move positions us several points below.
RP: Should we look to China for salvation for frozen shrimp?
RC: I have no doubt, China or Kazakhstan, it doesn't matter to me, the important markets of course help and it is necessary to derive shrimp. It has never been easy or we have not done it well, because in the end one has the easy thing and you go back there, it has not been possible to sell large volumes in other places. China stopped a lot, this year it is buying and I hope it buys more. We have to empty the market in Spain, the problem is in Spain, it is a price marker, it is an enormous volume and if you fish more where the surplus goes, to Spain, everything comes here. The seasons start with a lot of stock from the previous season and this did not happen, there was never stock from one year to the next and we fished twelve months a year. Now we fish for five months and there is stock; It is the sign that there is too much fishing.
Author: Karina Fernández | Revista Puerto (Traslated from the original in Spanish)
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