Ecuador's shrimp industry sounding alarm over USD 1 billion hit from lower prices, higher costs
Ecuador’s National Chamber of Aquaculture (CNA) has expressed concern over surging operating costs and falling international prices in the country’s shrimp sector that have “reached alarming levels.”
Given the situation, the sector has seen a USD 0.98 (EUR 0.90) decrease in liquidity for each pound of shrimp produced, equivalent to a year-to-date economic impact exceeding USD 1 billion (EUR 917 million), the chamber stated in a release.
The export price for shrimp has decreased USD 0.70 (EUR 0.64) per pound over the last 15 months, significantly harming the industry's revenues.
The fall in international prices, mainly due to lower consumption in China and other markets, is seriously affecting the sector’s production chain, resulting in an organizational inability to cover production costs. Prices recorded currently are even lower than those registered during the pandemic in 2020, CNA said, “which presents an unprecedented problem.”
Throughout the last decade, Ecuador has become China's top shrimp purveyor. In 2022, China imported 900,000 metric tons (MT) of shrimp, of which 70 percent came from Ecuador; its closest competitor was India, which was responsible for about 19 percent. In 2022, Ecuador sold about 60 percent of its shrimp production to China, compared to around 49 percent in 2021.
However, in response to China's zero-Covid import limitations, Ecuador pivoted toward serving U.S. and European markets, upping its peeled and value-added product-making capacity as a result. While that shift has allowed Ecuadorian exporters to diversify their buyer portfolio, the transition has not prevented them from getting hit hard by a global glut of shrimp that has resulted in slack demand and lower prices paid to producers.
In February 2023, CNA President José Antonio Camposano predicted some of the woes Ecuador’s shrimp sector is now experiencing, calling 2022 “a year of contradictions." Ecuador produced 26 percent more shrimp by volume, but that helped to exacerbate stockpiling in the U.S.
Meanwhile, in the last year, CNA said that industry costs have increased by ...
Photo courtesy of Ecuador's National Chamber of Aquaculture