Despite the sector's efforts to diversify markets towards Europe and the United States, reduced consumption in China and domestic problems have significantly impacted the industry's revenues and sustainability.
Combined, the economic slowdown in China, the suspension of shrimp exports from several Ecuadorian exporting firms, electricity rationing and insecurity, drove Ecuadorian shrimp exports to contract by 19% in the first quarter of 2024.
The explanation came from José Antonio Camposano, president of the National Chamber of Aquaculture (CNA), and Felipe Ribadeneira, president of the Ecuadorian Federation of Exporters (Fedexpor), after the latter released the results of the export sector in January-March
“These elements that have put a lot of additional cost pressures on shrimp companies in all their stages --production, packaging, logistics and export,” Felipe Ribadeneira, Executive President of Fedexpor, told AméricaEconomía.
Over the last five years, an average of 54% of shrimp exports were earmarked to China but the economic slowdown in that nation meant lower demand from the Chinese consumer. The trend was so acute that Chinese imports of seafood products (fresh and frozen) fell 4% in the first quarter of 2024, coming from a 15% growth rate in the past, Ribadeneira explained.
In this context, and according to the latest Fedexpor statement, Ecuadorian shrimp exports registered a 57% drop in March.
That said, the export decline was mitigated by initiatives from the shrimp sector intended to diversify production lines towards products that have other marketing channels, incorporate a greater value-added, or reach other destinations such as Europe and the United States, further explained Fedexpor's president. The The Asian giant's suspension of several Ecuadorian export companies --due to a technical issue regarding the levels of a preservative-- was yet another blow that has already lasted three months.
“We are waiting for Chinese customs to lift the measure,” Camposanto said on Friday.
Another problem is the collapse of international prices for the crustacean. Although Ecuadorian exported volumes rose by 14% compared to 2022 (to, 2,677 million pounds), exported value went to US$ 6.29 billion, US $1 bllion less than what was received in 2022, according to Fedexpor figures.
Read more in: Ecuadorian shrimp closed 2023 with 14% more exported volume, but its income decreased
The average price of exported shrimp was US$2.35 per pound in 2023, a 13% year on year decline. The price was US$2.48 per pound in January, but in December it reached US $2.15 per pound. This year prices registered a 3.6% growth, but their average is still below that of 2023 and 2022 (US$ 2.84 per pound).
Consequently, the Ecuadorian shrimp sector focused efforts on diversification and headed to the European and US markets. In the latter market, shrimp from Ecuador went from 25% of total import volumes in 2021 to 33% in 2023.
Read more in: Ecuadorian shrimp seeks potential buyers in Europe
Still, shrimp continues to be unprofitable or unsustainable over time, so companies are choosing to look for other product and market alternatives where prices can be higher, said Felipe Ribadeneira.
“In recent weeks, the challenges that shrimp can face a complex situation have become even more complex, considering the power outages, as well as insecurity,” he concluded.
