Shrimp markets and demand are not growing at the same rate as production.
There is a global gap between farmed shrimp production and its market, as demand has not grown at the same rate as production in recent years. There is significant potential for production expansion, but markets are not absorbing it in a way that benefits every part of the value chain fairly.
All meat-producing industries—including seafood—can experience business cycles and frequent ups and downs caused by disease outbreaks, economic conditions, changes in market demand, and more. In this regard, the global farmed shrimp industry is no different from other industries, although it does have one advantage.
How is the shrimp industry different from other meat-producing industries? The extraordinary growth in production in recent years has been driven largely by Ecuador and a few other countries. According to Ecuador’s National Chamber of Aquaculture, recent data from January to October show shrimp exports increasing by 19 and 31 percent in volume and value, respectively, in 2021 compared to 2020, and by 32 and 43 percent in 2022 compared to 2021.
Since 2001, annual production has increased by between 7 and 34 percent, and exports have doubled on average every 2.5 years over the past decade. In 2021, Ecuador accounted for almost 20 percent of total global shrimp production and is reportedly on track to surpass this volume in 2022. In Asia, the shrimp production industries in India, Vietnam, and Indonesia have also experienced very significant growth over the past decade, although not to the same extent as Ecuador. Other countries also have significant potential to continue increasing farmed shrimp production, including Brazil and Venezuela.
There is no doubt that the industry can produce large quantities of farmed shrimp, given continued advances in genetics, nutrition, health control and other areas. The shortening of the farmed shrimp life cycle, which allows it to respond quickly to changing market conditions, is another factor in the growth of production. But the bigger question is whether current markets will absorb this volume of production.
But there are signs of a downward trend due to falling prices, global inflation, a potential recession, as well as economic uncertainty in major export markets. There is reason for concern, as shrimp farmers in various countries are reluctant to maintain stocking rates or even stock their ponds at the current time. This suggests a decline in production early next year and a possible decline in global exports.
So there appears to be a gap, as global shrimp markets and demand are not expanding at the same pace as production. There are several reasons for this, including the serious consequences of the global pandemic and its impact on the global economy, supply chains, economic and industrial growth and trade. We will eventually overcome these consequences, but what about demand?
Developing demand for farmed shrimp needs to involve all stakeholders in the value chain, from producers to marketers and include downstream industries such as feed and equipment manufacturers and other suppliers of materials and services.
Shrimp products generally need to be affordable and competitively priced for the end consumer compared to other options such as seafood, poultry and beef. The industry also needs to offer consistent quality and availability, as well as products with higher added value and ease of consumption. Increasing market share in the growing fast food sectors is key to developing demand and consumption of shrimp. The presence of shrimp in the domestic markets of many countries can and should be increased. India’s recent initiatives in this regard are commendable.
Reaching new generations who are more committed to environmental responsibility and healthy food and turning them into lifelong consumers is essential. Continuous innovation throughout the production and marketing chain is also important. Responding to the growing expectations of consumers in terms of health, sustainability and responsibility is essential, and having the appropriate certification is a valuable tool to achieve these goals.
The shrimp industry has significant potential to expand global production and reach millions more consumers. This will be achieved through responsible intensification and improved production technology and methods. But first and foremost, markets must be able to absorb this volume of production in a cost-effective manner, with every part of the value chain benefiting from it, not just parts of it.
