Ecuador’s shrimp exports demonstrate solid growth in 2021
Pessimistic beginning, but an upbeat continuation
The beginning of 2021 was not very optimistic for Ecuador’s shrimp sector. In January-February, shipments of this crustacean from the country were worth $526.86 million, a 15% drop compared to the same period last year. The export volume was 6% lower year on year. The reduction in exports was due to lower purchases from China earlier this year. Despite upcoming Lunar New Year’s celebrations, when demand for shrimp in the country rises, local consumers were still hesitant to buy frozen imported shrimp from Ecuador, amid earlier reports of COVID traces on seafood packages. Another critical point for smaller imports was the suspension of shrimp deliveries from one of the largest Ecuadorian crustacean exporting companies, Songa, in January 2021, due to the discovery of white spot disease on frozen shrimp. This ban was lifted at the end of March 2021.
However, Ecuadorian shrimp exports have set an upward course and have been constantly increasing since March 2021, fully offsetting previous losses. According to the NCA, frozen vannamei shrimp exports from the country were $2.95 billion worth in March-September 2021, representing a 42% surge compared to the same period last year. The export volume jumped by 28% year on year and exceeded 498,000 tons.
Ecuador export volumes of frozen shrimp showed the strongest gain in April 2021, when the shipments to foreign markets reached 75,900 tons, which is 31% higher than in April 2020. The export value totaled $404.5 million, representing a 27% growth year on year. The main reason for a spike in export shipments was attributed to reviving import demand for this crustacean in the USA and Europe, as the countries started to lift COVID restrictions and life was going back to normal.
In July-September 2021, Ecuador’s shrimp sector received another incentive for strong exports. In addition to solid demand in the US and EU, whose traders were stocking ahead of the Christmas holidays, heavy buying from China underpinned Ecuador’s shrimp exports. Chinese imports were especially strong in September, as the country began to secure shrimp volumes for the celebrations of the Lunar New Year 2022, which is scheduled two weeks earlier than in 2021. Constantly rising prices, logistics disruptions, and other uncertainties made China act quickly to contact necessary amounts for successful festive celebrations. The data of NCA show that Ecuador’s frozen vannamei shrimp exports to China totaled 41,176 tons in September 2021, 91% more than in September 2020. Thanks to high prices, the value of exports jumped by 150% to $263.6 million year on year.
Vital diversification of import markets
According to Tridge’s regional manager in Ecuador, Pedro Angel, diversification of destination markets for the Ecuadorian shrimp has been one of the top priorities in the past two years. In 2020, China accounted for 54% of total Ecuador’s shrimp exports. Since it is more than half of the whole volumes of Ecuador, this makes the country’s exporters dependent on the purchasing behavior of the Chinese market. This was brightly seen in 2020 when the pandemic created additional trade complications for shrimp exporters. Sluggish Chinese demand amid a series of lockdowns, constant inspections of Ecuadorian frozen crustaceans on the availability of the while spot decease and COVID-19 traces, not mentioning long queues for unloading resulted in price drops, and consequently, a plunge in the export value. Therefore, a vital task for the Ecuadorian shrimp sector is to diversify the selling of its products to mitigate the risks of the influence of only one dominant market player.
As the recent data from NCA show, the share of China in total imports of Ecuadorian shrimp was 44% in January-September 2021, which is 9% less than in the same period last year. At the same time, Ecuador managed to build up frozen shrimp supply to the USA, whose share increased from 18% in 2020 to 23% in 2021.
Not only did diversification mean finding new countries for selling, but also tailoring Ecuador’s shrimp sector to the requirements of the destination market. To do so, the industry has been working hard on quality certification as well as creating more value-added shrimp products, as Tridge’s regional manager, Pedro Angel mentions. When exporting to China, Ecuador usually sends HOSO (head-on shell on) frozen shrimp, whereas the US, for example, has different preferences. US importers are more targeted at buying frozen shrimp tails or peeled undeveined (PUD). Creating a value-added product has demanded big investments to be made into the sector, especially in hiring more labor. Although while exporting processed shrimp the total volume of shipment decreases, the value of the export value of such a product rises.
Export prices on a rise
Ecuador’s HOSO shrimp prices have been increasing since the beginning of the year. However, the biggest value gains were seen in September and October 2021, as China started massive buying as the preparation for the Lunar New Year. As of November 1, the average price for Ecuadorian fresh HOSO shrimp (40/50 pcs per kg) was $6.80/KG FOB Guayaquil, which is $0.60/kg more than two months ago.
The first call for a price increase was in February 2021, when the Ecuadorian government announced a rise in diesel prices (read more on “Farmgate Ecuadorian shrimp prices of early February and update on the sector”). Since then, fuel prices have increased even more. Because it is used throughout the whole supply chain, by shrimp farms to pump water, by logistics operators to carry shrimp from farms to processing facilities and then to ports and overseas, shrimp prices have been reflecting this change. On top of high logistics costs, exporters have faced increasing packaging costs due to the lack of paper in the country available for the production of corrugated boxes.
Another factor that fuelled export shrimp prices was persistent international demand for the crustacean, from the EU, USA, and China, as the countries started to recover from the pandemic issues in 2020.
Sources:
CÁMARA NACIONAL DE ACUACULTURA.NATIONAL CHAMBER OF AQUACULTURE
SeaFoodSource. Ecuador’s shrimp industry finds silver lining in COVID-19 pandemic
Eluniverso.com Criteria divided into pricing of diesel and extra gasoline and eco-country in Ecuador
Rodaint.com Ecuadorian shrimp prices continue strong, European and American businesses start Christmas stocking mode
Rodaint.com Banned for 63 days, Ecuadorian shrimp producer Songa finally lifted the ban
Rodaint.com In September, Ecuador exported 41,176 tons of vananmei shrimp to the Chinese market
Seafood-tip.com Less shrimp this Chinese New Year?
SeaFoodSource. Ecuador makes quick shift to diversify its shrimp export strategy
Tridge.com Farmgate Ecuadorian shrimp prices of early February and update on the sector
