Once heavily reliant on China as the preeminent market for its shrimp, Ecuador is now accelerating a shift toward serving the U.S. market.
Ecuador’s shrimp exports to the U.S. from January through March 2021 rose to 35,497 metric tons (MT), up 26.8 percent from the 25,985 MT it exported to the U.S. in the first quarter of 2020, according to the most recent NOAA statistics.
Facing a Chinese market that has become increasingly restricted, in part due to intensified customs inspections instituted in response to the Chinese government’s fear that COVID-19 could enter the country on the wrapping of frozen seafood, Ecuador reached out to seafood industry financial firm Lighthouse Finance to ask it for help in making the shift to supplying the United States, according Lighthouse Seafood Advisors Partner Rahul Kulkarni.
“There has been a shift happening in terms of the geopolitics. China was always a big market for Ecuador, but now China is becoming more closed off,” Kulkarni told SeafoodSource. “When that started happening, Ecuador saw a chance to shift to supplying the U.S.”
Lighthouse Seafood Advisors is now “looking at supporting the Ecuadorian government to develop solutions for the industry” to help it become more competitive in the U.S. market, Kulkarni said.
“We already have a few projects going strongly ahead,” he said.
However, Ecuador faces stiff competition from India, which has been the largest shrimp exporter to the U.S. for years. Moreover, the structure of Ecuador’s shrimp-farming industry, with large farms and lower-density farming practices, and its historical precedent of harvesting the bigger-sized shrimp preferred in China, are impediments to entering the U.S. market full-bore, according to Kulkarni.
Nevertheless, Kulkarni said, the opportunity is there. India, currently struggling with a severe COVID-19 crisis, has seen its shrimp exports to the U.S. stall out thus far in 2021. Even though the U.S. imported 9 percent more shrimp in the first three months of 2021 compared to the same time-period in 2020 – 184,852 MT versus 168,158 MT – India’s exports have actually dropped from 68,894 MT to 67,077 MT between January and March. And India's situation is likely to worsen in coming months.
Though clearly affected by the global COVID-19 crisis, the U.S. market for imported shrimp is shifting, with rising players like Indonesia, Vietnam, and Ecuador all grabbing more market share. That provides Ecuador with an opening to press its current advantage, Kulkarni said.
“The stocking price in Ecuador will always be lower than India because of the way their farms are structured,” he said. “Ecuador is now looking hard at the U.S.A. as a larger market. It’s seriously rethinking the structure of farming models, and that also means it’s having to look at new farming technologies, like [recirculating aquaculture systems], where they’ll be able to take more crops in a year, harvest more often, and come out with smaller sizes, in order to be competitive in supplying the U.S. market.”
The Sustainable Shrimp Partnership, founded by leading Ecuadorian shrimp firms including Songa, Grupo Almar, Omarsa, Naturisa, Grupo Lanec, Promarisco-Grupo Nueva Pescanova, has sought to promote Ecuador’s shrimp as safe and sustainable in the United States. At the group’s launch in 2018, Karina Amaluisa, Ecuador’s trade commissioner in the Trade Office of Ecuador in New York, told SeafoodSource a major goal for the Ecuadorian companies involved in the initiative is to create differentiation for its shrimp in the U.S. marketplace, with India specifically named as its chief competition.
“Competitors from Asia, chiefly India, present a product that is slightly less expensive, but they don’t have the quality of Ecuadorian shrimp,” Amaluisa said. “The sector is seeking to promote this [initiative] because many of our companies have already implemented innovations related to traceability, quality control, and the elimination of the use of antibiotics, and we think that provides us a competitive advantage.”
In a March press release, José Antonio Camposano, executive president of Ecuador’s National Chamber of Aquaculture, said SSP members “saw that it was necessary to lead shrimp industry worldwide and turned into a new direction, embracing a race to the top, promoting changes among producers and offering consumers reliable products.”
“One of the main goals SSP set three years ago was to elevate the performance of the whole industry, so seeing other companies in various regions adopting these challenges is a proof that the industry is willing to improve; they just need someone who takes the lead and SSP will continue to do so,” Camposano said.
Photo courtesy of Sustainable Shrimp Partnership
