Unless something unexpected happens, the worst is yet to come for the second Ecuadorian industry in importance for the generation of foreign currency: the shrimp farm.
International reports reveal a fall in prices that threatens to continue until 2020, if the increase in production continues in the four main suppliers in the world.
Since February 2013, the average price per pound of shrimp (conversion of pounds exported per dollars received) from Ecuador had not been as low as in the last months of June and July: 2.87 and 2.88 dollars per pound.
“We are going out on boards,” says aquaculturist Édison Ramos. The producer receives from the intermediary $ 1 for each pound of animals of 10 grams and $ 1.50 for the one of 15 grams “with which nothing is gained”.
Who loses is the one who rents the pool to produce and more when for these weeks the sack of 40 kilos of balanced food climbed between 1 and 2 dollars, which rises more an activity where 60% of the cost represents the food.
An international report predicts that the production of the vannamei variety – which is also grown in Ecuador – will probably increase from 3.03 million tons in 2017 to 3.64 million tons in 2020. Those that will contribute to this increase are India, Vietnam, Indonesia, Ecuador, China and Thailand.
The collapse in world prices seen in the first half of 2018 is indicative of a “new reality” in terms of future levels, said a Rabobank analyst. “The first signs of a price collapse were visible in 2017, when supply began to exceed demand and China’s previously insatiable appetite was eased a little,” said Gorjan Nikolik, associate director of the bank for animal protein and seafood at Rabobank.
Ecuador has played strong in that field, boosted by sales to China.
According to the National Chamber of Aquaculture, in 2015 Ecuadorian shrimp farms produced 720.3 million pounds and finished 2017 with 938.5 million pounds. In the first 7 months of the year that Ecuador runs, it has already produced 636.7 million pounds and $ 1.867 million, twice the annual budget of the Municipality of Guayaquil.
Many shrimpers are harvesting their pools at a loss, or at least with a much lower profit margin in the last five years, mainly because the key elements of cost are part of the equation, such as food, energy and labor, they have not contracted.
Rabobank says that more than half of Ecuador’s exports go to China. Much of this goes through the “gray channel” of Vietnam, although China has taken energetic measures and reduced import tariffs from 5% to 2%.
The country has room to increase its production through intensification. The Government promised to bring electricity to 45%.
While the rate of supply growth in recent years is likely to be slow in India, growth should continue. (I)