Argentina is a growing shrimp supplier with landings of Argentine red shrimp (p.muelleri) increasing by 80 percent between 2014 and 2017, from 129,000 to 233,000 tonnes. Argentine red shrimp is considered a premium product with its large size, unique color, and succulent and sweet taste much akin to lobster. Shrimp production in Argentina is booming and the Argentine red shrimp is reaching new and bigger markets, particularly in Northwestern Europe. But there are concerns about its sustainability. Shrimptails investigates the current state of the shrimp fishery in Argentina, explores what has driven this rapid expansion in the Argentinian export market and how this catch is finding its way into new markets in Northwestern Europe.
The background: The steady rise of Argentina’s shrimp production
The shrimp industry in Argentina can be split equally into onshore and offshore fishing fleets, with 108,000 tonnes of sea-frozen (by the offshore fishery) and 119,000 tonnes of fresh products (by the onshore fishery) landed in 2017. Onshore production has doubled since 2014 while offshore landings have increased by only 25 percent.
The offshore season runs from March until November peaking between June and October. The fleet consists of industrial vessels with onboard freezing facilities enabling it to land frozen products ready for export. Sea-frozen shrimp are mainly landed head-on shell-on (HOSO) or headless shell-on (HLSO) in Puerto Madryn on the coastline of central Argentina.
The onshore fishing fleet consists of a larger number of artisanal vessels that land fresh products for the local processing industry. Fresh shrimp landings, however, are not season-dependent and the onshore artisanal fleet fishes all year round but catches are less predictable than the industrial fleet. The main ports for fresh-shrimp landings are Rawson and Comodoro Rivadavia in the province of Chubut in southern Argentina, and Deseado in the Santa Cruz province, also in southern Argentina.
With companies such as Grupo Verez and Pescanova active in the industry, it is dominated by large consolidated national and international fishing enterprises active across all areas of supply chain from fishing to processing and trade.
What’s going on outside of Argentina? International markets enjoying the fruits of Argentina’s hard labor
Trade data from Trade Map and Senasa show that Spain has traditionally been the main importer of Argentina’s red shrimp and remains the largest export market. Yet changes in landing trends have led to other markets absorbing some of Argentina’s catch with China, the U.S. and Northwestern European markets all now taking an increasing share of Argentina’s shrimp exports.
China is by far the fastest growing market with imports soaring to USD 194 million (EUR 166 million) in 2016, up from USD 16 million (EUR 13 million) in 2012, an astonishing increase of 1,200 percent. Argentina’s long-standing import partner Spain showed a less dramatic but steady increase of 32 percent over the same period from USD 271 million (EUR 231 million) to USD 358 million (EUR 306 million), up by USD 84 million (EUR 71 million).
While the sea-frozen products are exported directly into established markets in Spain, the growth of export markets such as China and Northwestern Europe is fueled by increased volumes of land-frozen products. Before reaching the final markets, land-frozen products are mostly reprocessed and re-exported by processors in countries such as Peru, India and Spain.
Demand for Argentine red shrimp has now outgrown supply, which has had a significant knock-on effect on price − its export value in 2016 reached USD 1 billion (EUR 855 million), an increase of almost 50 percent on its 2012 export value of USD 500 million (EUR 427 million). Shrimp exports are Argentina’s second-largest export product after beef.
While it is hard to access exact figures, we know that HLSO shrimp finds its way into the broader E.U. market after being processed into peeled products in countries such as Spain, Peru, and Vietnam, ready for the wholesale market – northwestern E.U. countries prefer easy-to-cook shrimp options.
Almost all major shrimp importers in Northwestern Europe offer Argentine red shrimp as part of their product catalogue, as do companies operating specifically in Northwestern Europe − Hottlet Frozen Foods and Solea International being two such companies, the latter providing ShrimpTails with a unique insight into one of Europe’s largest importing companies in our interview with Managing Partner Adriaan de Leeuw.
The production boom: Is it sustainable?
The rapid increase in Argentinian shrimp production in recent years raises sustainability questions. Presently, both sources of Argentinian shrimp − onshore and offshore − are on the red list of Seafood Watch in the U.S. As a response to concerns about its sustainability, the Argentinian industry and some buyers, together with CeDePesca, an NGO active in fisheries in South America, have started two Fishery Improvement Projects (FIPs) for onshore and o shore shrimp fishery. The onshore FIP will cover 20,000 tonnes of shrimp landed in the province of Chubut while the offshore FIP will cover 80,000 tonnes of shrimp caught in the FAO Southwest Atlantic Major Fishing Area 41.
In April 2017, SeafoodSource reported that major advances have been made in the onshore FIP focusing on research practices, understanding bycatch and habitat impacts, resolving compliance issues and improving the management system.
Progress in the offshore FIP was reported to be slower over 2016 and 2017, largely due to “coordination difficulties” with federal authorities. Another reason may be that sea-frozen products, especially HOSO products, end up in markets that have less stringent requirements about certification compared to markets in Northwestern Europe and the U.S. where retailers demand certification to sell seafood products directly to consumers.
In early 2018, CeDePesca, SeafoodSource reported the state government of the Chubut Province in Argentina along with several processors engaged in the FIP, signed an agreement to move ahead with the process to certify Argentina’s on-shore fishery with an unspecified certification scheme. The timeframe is yet to be announced.
Looking to the future
The rising trend in exports of Argentine red shrimp to new markets shows strong growth, particularly of the HLSO product, which is processed before being re-exported and sold into new markets around the world. Exports of HOSO shrimp from the off shore fleet remain stable and continue to be absorbed into traditional markets. Demand for Argentine red shrimp is increasingly high − too high, in fact, to match with supply and the price of Argentine red shrimp has skyrocketed in recent years. But there are concerns about its sustainability and, as a result, concerted efforts are being made to improve the management of the onshore and offshore fisheries through FIPs.
One of the biggest challenges for the long term is to ensure that improved fishery management and MSC certification will allow Argentina to sustain this level of production. Certification is a key element and vital for the market potential of Argentinian shrimp in Northwestern Europe and the U.S., which demand certification for shrimp to be sold directly to consumers in supermarkets. Big strides are being made here, but access to these more demanding markets will require a continued and coordinated effort by all parties involved in the Argentine red shrimp fishery.
Photo courtesy of New Sea ApS
