Chinese seafood firms are racing to invest in Ecuadorian shrimp breeding facilities in a bid to secure supplies and insulate themselves from soaring Ecuadorian shrimp prices, according to a leading company executive.
“The prices in Ecuador are so high right now and even though China is able to afford these prices it’s necessary to secure stable access to supplies by investing in Ecuador,” explained Li Kun, sales manager at Beijing-based East China Seas.
Li claims his firm has also invested in Venezuela and Panama, but declined to provide figures. “The prices being paid in India are very high for what is sometimes low quality…we need to secure quality,” he said.
Ecuador’s shrimp exports to China have soared in recent years. Ecuadorian firm Omarsa, which has an office in Beijing, ships 45 percent of its exports to China, amounting to up to 100,000 metric tons (MT) per month, said company executive Francisco Vanoni, speaking at Seafood Expo Asia in Hong Kong.
“Compared to Asia we are not cheap…our prices depend on presentation — head on or not … Shipments to the EU have traditionally been value added but no so much to China, which demands whole-round shrimp,” said Vanoi.
“Asia overtook Europe as the main destination for Ecuadorian shrimp exports in 2011 and we don’t see that status quo changing anytime soon…Diversity of export markets helps maintain the stability of prices.”
India remains the key competitor for Ecuador in China, according to Vanoni. A key selling point is quality.
“Ecuadorian shrimp farmers focus on extensive rather than intensive production,” he said, explaining that ten animals per square meters compared to 50 to 100 in various Asian nations.
“We don’t have the volume that China has…Ecuador produces only a third of China’s shrimp volume though this is increasing by about 20 percent a year.”
Ecuador has very good political relations with China, which has extended financing to the country through the China Development Bank, in part through energy deals which will see China import petroleum from the Latin American state — one of very few countries granting visa-free access to Chinese citizens.
Vanoni meanwhile doesn’t believe Ecuadorian firms benefit from state subsidies. “It’s a very level playing field…the only help we get is from the overseas embassies and trade bureaus which promote Ecuadorian products.”
The U.S. Department of Commerce (DOC) earlier this year decided that Ecuador uses government favors to rig prices in favor of its shrimp exports to the U.S. Ecuador was the only non-Asian among seven nations accused by the Gulf Shrimp Owners Association (COGSI) of using government subsidies to drive down prices of exported shrimp to the U.S.
