Many shrimp farms in Ecuador have been forced to close down or halt their activities due to the COVID-19 crisis, as production costs currently outweigh the benefits, several sources from the country's shrimp sector told Undercurrent News.
"As an example of how bad the situation is, shrimp previously sold for $2.50 per pound is now being sold for $1.10. At best, this barely covers production costs," a small shrimp producer from Pedernales, Manabi, told Undercurrent.
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"Many small producers are watching their businesses sink and go bankrupt. The situation is increasingly worrying, considering that there is also hardly any demand from the markets," he added.
According to the president of the shrimp producers cooperative of northern Manabi and southern Esmeraldas (COOPRACAME), Oswin Crespo, "this will entail a further loss of employment nationally as more farms will have to shut down or dry their ponds if the situation continues as it is now".
As of Aug. 1, head-on, shell-on (HOSO) farmgate shrimp prices were $3.10/kg for 30/40 count; $2.60/kg for 40/50; $2.50/kg for 50/60; $2.50/kg for 60/70; $2.40 for 70/80; $2.30 for 80/100; and $2.10 for 100/120 count shrimp.
"Prices have risen just $0.10 since [earlier in July]. That's not sufficient. Our jobs are still at stake," the small shrimp producer also told Undercurrent.
"Prices have hit rock-bottom and producers in Ecuador are having a really rough time not being able to cover production costs or even working ineffectually," a European importer purchasing from Ecuador told Undercurrent.
"The latest is that free-on-board (FOB) prices for 50/60 count shrimp, HOSO are $3.90; $3.80 for 60/70 count; $3.70 for 70/80; and between $3.30 and $3.40 for 80/100 count shrimp, which are very low. In addition, Europe is buying shrimp very slowly now."
Those producers who are still working are harvesting early, producing small-sized shrimp to make "quick money", he also said. "Many are no longer able to feed the shrimp, aiming to reduce their operational costs to the maximum."
"In the short term, we cannot see an early recovery, as things are getting more and more difficult each day and the future of our businesses is still extremely uncertain," another shrimp producer from the Latin American country said.
"We hope that the situation might improve in the coming year so that people can really get back to normal life and start consuming again at pre-COVID-19 levels. That is our hope now."
In terms of prices, however, there are those who believe that the situation may change in the coming months, with prices able to rise significantly due to the current situation.
"In 50 to 80 days, prices will soar due to the lack of demand and very little production, now that shrimp is not being cultivated or harvested in many places all over the country," a third small shrimp producer explained to Undercurrent.
"There will be little stock and less product to sell, which will inevitably drive prices up," he added.
In addition, the Ecuadorian government previously announced a "severe contraction" in its production and exports as a result of the market crisis and reduced demand.
According to projections from the Ecuador Camara Nacional de Acuacultura, the country is on track to ship just 11 million pounds of shrimp to China in July, or 4,990t, described by the industry association as "non-existent".
August 03, 2020 at 03:16PM
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Ecuador shrimp farms halt activities rather than lose money - Undercurrent News
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