The global shrimp: Is Asia losing out?

Zuridah Merican

The vannamei shrimp could not have been a better saviour for the Asian shrimp industry in the early 2000. It was the perfect combination of the push-pull factor. The monodon shrimp was decimated by disease and domesticated SPF broodstock arrived on the scene just in time. By 2010, Asia was producing close to 80% of global shrimp. Fast forward to today, Robins Mcintosh at the Infofish Shrimp 2022 forecasts that Asia will only contribute 55% to global shrimp production by 2030, from 65% in 2019. Why is Asia losing out?

Many of the symptoms of the plight of the Asian shrimp can be seen from take-away messages from three recent meetings. At Infofish Shrimp 2022, we report on production where Ecuador led the pack by crossing the million tonnes production mark followed by India.

Revenge consumption of shrimp has helped compensatory growth in the US and EU markets post Covid-19 but since the beginning of 2022, higher prices due to supply disruptions as well as inflation are negatively affecting demand. China, with its zero-Covid policy still sees poor food service demand due to restrictions. We may see supply exceeding demand affecting prices in 2H 2022.

At the PMI Talkshow in Bali, millennial farmers of Indonesia see the need to prioritise markets and sustainability over production volumes. Ex-farm prices are dropping after a peak in April and with increasing feed prices lending to higher production costs, margins are being squeezed. Nearly 80% of Indonesia’s exports are destined to the US. Whether Indonesia is over reliant on the US market, or its products match this market is irrelevant. It just makes it more difficult for Indonesia to pivot when prices fall.

Due to the large market and high number of genetics suppliers, Indian hatchery operators normally do not rely on any single supplier and willingly try new lines. The AISHA webinar for Indian hatchery operators highlighted their demands from genetics companies. Everyone is looking for high fecundity, good growth performance and robustness. There is an acceptance for robustness with a certain loss of growth performance only. With regard to efficiency, Jim Wyban showed that when production tonnage divided by post larvae produced, then India’s numbers have deteriorated.

How do we compare competitiveness amongst the leading shrimp producers? Arguably, the single best method of comparison is by direct cost of production, but average data is rather meaningless due to the high variation between the best and worst producers in Asia. Mcintosh highlighted that the coefficient of variation has increased from 13% in 2010 to 30% in 2020. Adding complication to this comparison is the number of crop failures in Asia. Another method of comparison is exfarm prices between countries for the same harvest sizes since economic theory assumes that all farmers require the same margins to survive or else, they would forego farming or sit out the next cycle. Kontali Shrimp shows interesting data for farm-gate prices of size 40 shrimp for week 27 this year. Ecuador has the cheapest prices at USD 4.25/kg vs India at USD4.70/kg vs Indonesia at USD5.01/ kg. Does this indicate Ecuador having the lowest cost of production and if so, why are the countries in Asia uncompetitive?

Asia’s most glaring weakness is its poor survival rates. From an average 80% in 2010, Asia is averaging ‘real’ survival rates of 60% today and this is discounting crop failures. It is critical to emphasise ‘real’ as most hatcheries provide a bonus quantity of 20% of post larvae which is never counted during stocking. The Asian industry is shooting itself in the foot with this practice as one could exceed the carrying capacity of the pond, causing stress to the shrimp, hence inviting disease. Ecuador does not face this issue with low stocking densities.

Another weakness is our apathy in promoting traceability, sustainability and branding quality shrimp. Although Ecuador has shown the way forward with its Sustainable Shrimp Partnership programme, not one of the Asian countries has taken advantage of this opportunity. Perhaps the business environment has been comfortable for Asia so far, but AAP hopes that it does not take a catastrophe for the need to change.

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If you have any comments, please email: zuridah@aquaasiapac.com