Producing Ecuadorian shrimp is 24% more expensive than in 2021
Producing Ecuadorian shrimp is 24% more expensive compared to the costs of 2021. The main factors that have influenced the increase in its production are the elimination of the differential price of diesel, which became more expensive by 16 cents per pound at the end of 2022. This affected 82% of the shrimp area.
The cost was also affected by the increase in the price of raw materials worldwide. Compared to 2019, wheat rose 71%, soybean paste 45%, fish oil 105% and fishmeal 24%.
This significantly increased the value of the balanced feed, one of the main items for the shrimp producer, which represents 55.2% of the total cost of production.
Competitors ahead
The National Chamber of Aquaculture points out in a statement that the depreciation of the currencies of competing countries or markets such as the euro made Ecuadorian shrimp exports more expensive. This phenomenon was repeated with China, the main destination for shrimp exports in 2022.
“India and Vietnam, Ecuador’s direct competitors, have several advantages over our country. Lower wages, input subsidies and their own currency,” the statement said. Both countries registered depreciations of their respective currencies in 2022. This gave them a temporary advantage over Ecuador, which, being dollarized, sees its offer become more expensive compared to these competitors.
The sector considers that the application of the automatic drawback would partially alleviate the problems. José Antonio Camposano, executive president of the National Chamber of Aquaculture, points out that the closing figures for Ecuadorian shrimp in 2022 do not reflect the harsh reality facing the industry.
“2022 was one of the most complicated we have had to face: depressed markets, a strengthened dollar, rising production costs, costs due to inefficient public services, insecurity at levels never seen before. Foreign sales do not show that reality”.
Insecurity and lack of credit
Among other problems, they ensure that the shrimp farm assumes a security cost that amounts to more than USD 80 million per year due to the implementation of video surveillance, tracking and communication systems.
The payment of private guards in rotating shifts and the losses due to robberies that they suffer daily are added. This is a fixed amount destined to deal with the crime that hits the sector by land and river.
According to figures from the Security Directorate of the National Chamber of Aquaculture, insecurity left one person dead and 20 people injured, only in 2023.
They also ask to look for credit alternatives for the shrimp sector, since currently interest rates, amounts or credit terms are not applicable to the reality of the sector.
Ecuadorian shrimp generates employment
Currently, Ecuadorian shrimp is the first non – oil export product of Ecuador and is a fundamental pillar for the country ‘s economy. It generates close to 290,000 sources of direct and indirect employment.
According to the Weekly Analysis newsletter by Walter Spurrier and Alberto Acosta Burneo: “For every 1% decline in shrimp production, 791 jobs would be destroyed; In addition, the added value would be reduced by USD 19.7 million and in payment of income tax by USD 1.5 million”.