August 27, 2024

Peruvian shrimp farmers face falling prices and lack of government support

Peru's shrimp farming industry is facing a severe crisis due to a sharp decline in international shrimp prices and the absence of government intervention, according to the country's National Aquaculture Society (SNA), SeafoodSource reported.

The Tumbes region, which borders Ecuador, is responsible for producing 90% of Peru's vannamei shrimp, a product that accounts for 98% of the region's exports. But a steady decline in prices since 2022 has forced many aquaculture companies in the region to shut down in 2023, with the situation worsening in 2024.

In contrast to other shrimp-producing nations such as Ecuador, India, China, and Thailand, where government support bolsters the aquaculture shrimp value chain, Peru's shrimp farmers have yet to receive aid. Requests for assistance from the Economy and Finance Ministry (MEF) and the Production Ministry (PRODUCE) have gone unanswered, according to the SNA.

"It is of great concern that we cannot count on temporary government support to overcome the crisis in one of Peru's most important aquaculture sectors, especially in the Tumbes region," the SNA said in a release. "We are left to our own fate under a free-market economy but are exposed to significant economic distortions."

The SNA called for funding, economic relief, and incentives to help mitigate the crisis. While the sector is turning to innovation to increase efficiency, rising input costs combined with declining global demand have taken a toll.

From January to May, Peru's shrimp farming industry produced 47,303 metric tonnes (MT) of shrimp, a 39.1% decrease from the same period in 2023. Exports during the first five months of 2024 totalled US$8.9 million, a 36.3% drop compared to the US$13.9 million registered in the same period last year.

The SNA projects that monthly production will fall to 21,000 MT by the end of the year, a year-over-year drop of 46.6%. The decline is attributed to further closures of shrimp farms and reduced seeding densities by the remaining companies due to limited working capital.

Although 7,453 hectares are authorised for shrimp production, only 3,161 hectares were planted in 2023. By July 2024, this figure had fallen to 1,400 hectares. The SNA reported that this contraction has resulted in significant economic losses for the country and led to a direct job loss of over 40%.

-      SeafoodSource