Volatility of the Top Large Shrimp ExportersMr. Gorjan Nikolik, a Rabobank expert, reflects, “If we look at history In the shrimp industry, China and Thailand were the two major powers 15 years ago. However, the EMS outbreak from 2010 to 2013 replaced India as the major shrimp exporting powerhouse and lasted for at least 5 years. At one point, India supplied 60% of the shrimp to the US market. Then, about 1-2 years ago, India struggled with rising production costs and low shrimp prices, Ecuador became the largest exporter and is now squeezing Asian producers out of many markets – Ecuador now has a 60% market share in China.” He also noted that while the general trend among many private companies is now towards intensive farming, the bigger picture shows that this is not a long-term strategy. “From a capital allocation perspective, land is the most important asset and if you want to maximize the use of that asset, you have to increase the density of farming in the same area. However, there is an element of environmental and biosecurity risk if you go beyond the limits of what technology & techniques allow, farmers may make money in the short term but may set themselves up for failure in the longer term,” he argues.

This is also true of the fact that the world’s leading shrimp exporters have increasingly low stocking densities.

Nikolik notes, “China and Thailand have an average stocking density of 120 shrimp/m2, India has an average of 75 shrimp/m2, Ecuador has an average of 25 shrimp/m2.”

Intensive farming has led to increased disease and mortality.

He further explains, “China and Thailand were replaced by India as the major shrimp exporters due to EMS outbreaks. And finally India was replaced by Ecuador because of farm failure rates of up to 40% due to biosecurity challenges. There was a clear mismatch between what they were doing and what they could do at the time.”

The Power of Retail

Competition is the nature of the market. And it seems that many producers have not learned the lessons of early success stories – they have struggled to stay competitive.

Mr. Nikolik notes that “This is such a competitive industry that when someone with a lower production cost enters your market, it is very difficult to recover. Once the disease appears, the production costs keep going up and it is difficult for the big retailers to give you a second chance and you have to pay more. The supply curve of shrimp is too elastic. If you don’t create a better product & lower cost, you will lose customers.”

It is clear that there is no single path to success in shrimp farming and producers need to find – or develop – a model that suits their specific circumstances.

“For me, it is still unclear what is optimal for the shrimp industry and there is probably no one-size-fits-all strategy,” Nikollik asserts.

Source: https://thefishsite.com/articles/what-shrimp-farming-model-is-going-to-ensure-long-term-success

Translated by: Marketing Department – ​​Vinhthinh Biostadt group