Latin American shrimp glut, weaker Chinese demand hurting Southeast Asian producers

A Malaysian shrimp farm.

Oversupply of shrimp from major Latin American producers – particularly Ecuador – is causing headaches for producers in Southeast Asia.

Benjamin Saw, the general manager of Malaysian shrimp producer Arus Nagamas Private Limited, based in the country’s Kota Kuala Mudah region, said his firm traditionally relied on strong Chinese demand to suck up supply and stabilize prices in the region. But, the influx of Latin American supply has wiped out profitability on Malaysian farms.

“The global prices are really bad for farmers in Malaysia now as our cost is around CNY 18 [USD 2.50, EUR 2.32] per kilo compared to Ecuador's CNY 12 [USD 1.67, EUR 1.55] per kilo … No wonder they can dump prices. We have managed to clear most of our prawns but only at a small profit,” Saw told SeafoodSource. “Many farmers producing 100 [metric] tons in a six-month cycle are now losing money. We had one pond that produced 6,000 kilograms and still [suffered] a CNY 20,000 [USD 4,200, EUR 3,800] loss. We need prices to be CNY 24 [USD 5.04, EUR 4.56] per kilo and above to allow us to buffer for bad pond performance.”

The traditional bounce in demand from Chinese New Year has also not been as profound this year, according to Saw.

“Prices have [in February] gone up to ...

Photo courtesy of Pro Aerial Master/Shutterstock

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