Additional reporting by Oriana Aguillon

Days after looking dead-in-the-water, Argentina's main red shrimp fishing season is underway and exporters have the chance to salvage some profitability given prices are expected to rise on a shortage. 

The exporters met terms with the fishing union on July 17 after a lengthy standoff that has delayed the fishing season by several weeks. Fishermen are now observing COVID-19 quarantine measures before going out to sea in early August. Major trawlers will have 10 weeks to capture Argentina's prized red shrimp before the fishery closes for the spawning season mid-October. 

The on-board frozen trawlers are not expected to fish more than 50,000 metric tons, half of the usual amount, meaning that prices should rise given the absence of stocks in Argentina, one major exporter told Undercurrent News. The market will be aided by the partial recovery of markets in southern Europe and a return to positive economic growth in China.  

"We know that stocks have dropped a lot in Europe and Asia, and knowing that the high consumption period for shrimp in Italy and Spain is Christmas, we will have to see if there another outbreak in the next few months in Europe," a second exporter told Undercurrent. "But we still think that there will be demand considering prices are at historic lows." 

With an absence of red shrimp on international markets, there is no current reference point for price negotiations. Traders have diverging views over the last known price movements. The first exporter that trades are currently being executed at a value of $6.50 a kilogram for the most commonly traded L1 and L2 sizes. The second exporter said prices have plunged to historically low values of between $4.50-$5/kg. To put that into context, prices traded a $9/kg a decade ago, representing the highest ever prices. A third exporter told Undercurrent some trades have taken place at $5.25/kg for L1 and $5.20/kg for L2 for produce from the frozen on-land season earlier this year. The first exporter said that first sales from the upcoming frozen on-board season might fetch prices between $7-$7.50/kg. 

With the delay to the season, the exporters are set to miss the European holiday season and will be selling into the Christmas period. The recovery in China's economy also gives some hope as the negotiation period approaches for the Chinese New Year. These negotiations often have taken place months before the holiday which is officially set for the week of Feb. 12, 2021.  

The third exporter told Undercurrent that even though the fishermen's union, known as SOMU, and exporters agreed on a fee for this year, some details of the negotiation have yet to be finalized. 

Workers get paid a base salary and a bonus that is linked with productivity and the price of shrimp. Exporters proposed freezing pay in peso terms to cope with the tougher market conditions this year, while fishermen held out for a wage that contemplates a double-digit decline in the Argentine peso and rampant inflation in the South American country.  Tensions flared in recent weeks and a picket line stopped 500t of produce from reaching on-land processing plants on time. 

Then there is the pandemic. Argentina had 130,774 infected people with COVID-19 as of July 21, one of the highest rates in the world, according to the John Hopkins University of Medicine. Most of these infections are in Buenos Aires and other major cities, while the south of the country is relatively untouched. Other seafood exporters such as Ecuador have struggled in recent weeks with forensic Chinese inspections finding coronavirus in containers.