Disease outbreaks in major shrimp producing regions and a considerable devaluation of the Brazilian currency have left many importers in major markets keen for Brazil to return as an exporter, according to a new report compiled by Rabobank International.
The Dutch multinational banking company’s report, “Feeding Nemo – Turning Brazil’s Economic Turmoil into Seafood Business Opportunities,” recalls that shrimp was the first modern aquaculture industry in Brazil. Starting in the early 1970s and growing rapidly with a strong focus on exports, especially to the U.S. market, the industry reached more than 90,000 metric tons (MT) by 2003, making Brazil the largest shrimp-farming region in the Americas.
“At that time, expert opinion was that Brazil would emerge to become a dominant force in shrimp aquaculture. But it was not to be,” said the report. “Shrimp is a species that is particularly susceptible to disease outbreaks and climatic changes. Diseases such as infectious mionecrosis virus (IMNV) and white spot, floods and droughts, combined with unfavorable trade legislation (antidumping duties to the United States), decimated the industry.”
As a result, the Brazilian shrimp industry stagnated – averaging 50,000 MT to 70,000 MT annually throughout the last decade. In the same period, shrimp aquaculture more than doubled globally, becoming a large industry and producing over 3.5 million MT.
“To put it in perspective: Ecuador, where the industry was also decimated by disease in the 1990s, recovered and is now Latin America’s largest shrimp producer. With a small fraction of the land, coastal water and feed resources compared to Brazil, and no domestic market, Ecuador’s shrimp production is close to 350,000 MT, with annual exports of over USD 2.3 billion (EUR 2 billion),” said Rabobank.
In 2015, a white spot outbreak caused a decline in shrimp production to an estimated 59,000 MT and this year’s production has also been affected with production forecast to fall to 52,000 MT.
Going forward, with the potential spread of the virus, the outlook for the shrimp industry in Brazil is “mixed,” said Rabobank. But on the other hand, the report highlighted that the industry operates in a huge internal market isolated from imports, by tariffs and, more recently, biosecurity import barriers.
According to the Brazilian Shrimp Farmers Association (ABCC), the per capita domestic shrimp consumption is 0.55kg. Therefore, only a small shift of consumption patterns could mean rapid growth for the local shrimp industry, said Rabobank.
“Moreover, disease outbreaks in key shrimp-producing regions such as Thailand, China and Mexico, along with the falling Brazilian real, have left many importers in the US, the EU, Japan and China eager for Brazil to return as an exporter.
“In 2015, Brazil exported only a negligible amount of shrimp, but if the supply were to increase, there would be plenty of buyers. Finally, with rapid innovation in the shrimp aquaculture industry and the increasing presence of leading aquaculture companies in Brazil, we can assume that innovation in genetics, feed formulas and husbandry technology will soon unlock Brazil’s potential in this high-value aquaculture industry,” it said.
Rabobank’s report also forecasts Brazil’s tilapia production to increase by 10 percent a year – reaching 490,000 MT by 2020, and the country’s annual production of the native freshwater species tambaqui to reach 330,000 MT, thanks largely to its rapidly expanding grain production.
