Bangladesh – Tiger Prices Fall, Demand Disappears
As a result of declining demand and the depreciation of currencies in its major overseas markets, shrimp farmers and processors have fallen on hard times. Industry sources say many buyers are cancelling orders, while others are seeking discounts on established deals.
Khan Habibur Rahman, deputy managing director of Lockpur Group, one of the main shrimp processors, said, “It is a very bad situation. Prices are falling fast, while sales are down. The business has been dormant for the past two months.”
The ample production of Penaeus vannamei in India and Vietnam has been blamed for the slump in demand for the locally grown giant tiger shrimp (P. monodon). “Exporters in these countries are offering very low prices,” Rahman said.
Shoyeb Mahmud, general manager of Jahanabad Seafood, Ltd., said giant tiger shrimp are selling for $6.5 a pound, down from $9.2 as recently as two months ago. “I doubt if the farmers will be able to breakeven, but the small ones will definitely be hit hard.” Many buyers are renegotiating prices of already placed orders, he said, adding that stocks are piling up in almost every processing plant.
The sinking euro and the recent slide of Russian ruble have added to the misery. The drop in their value increases the import costs in Europe and Russia, which together account for nearly 75 percent of the Bangladesh’s shrimp exports, said Mohammad Amin Ullah, president of the Bangladesh Frozen Foods Exporters Association (BFFEA). “We are completely stuck. Many buyers have totally stopped buying. And the tension in Ukraine instigated by Russia has compounded our woes,” he said, adding that many of the buyers have asked local processors to halt the shipment of previous placed orders and some have even withdrawn orders.
Although shrimp exports started the fiscal year on a good note, they began falling in early summer. Between July and November, they were $276 million, down 4.55 percent year-on-year, according to Export Promotion Bureau. “Come the end of December, the decline might be 15 percent,” the BFFEA president said. The sector earned $550 million in exports last fiscal year, a 21 percent rise over the previous year. The sector provides livelihood for 833 thousand farmers, who cultivate shrimp on 275 thousand hectares of land in the coastal areas of southwest Bangladesh, according to the Department of Fisheries.
Mohammad Shah Alam Sheikh, a shrimp farmer in southwestern Bangladesh, said, “All of us, from large farmers to small ones, are counting huge losses because of the price collapse.”
Source: The Daily Star. Shrimp Farmers Staring at Losses. Sohel Parvez. December 18, 2014. http://www.thedailystar.net/shrimp-farmers-staring-at-losses-55912 – Image: worldwildlife.org