BANGLADESH’S SHRIMP INDUSTRY SPIRALLING DOWN

Bangladesh’s shrimp industry spiralling down, but some try to change the tide. Bangladesh’s export-oriented shrimp industry suffers from a supply shortage and a lack of market access. Exports have gradually dropped from around 55,000 MT in 2016 to only 25,000 MT in 2023. Around 17,500 MT would be accounted for by black tiger shrimp, and the remainder would consist of a combination of farmed freshwater prawn and wild-caught shrimp. The EU accounts for 70% of the export volume, the UK 12%, and the US 6%. Within these markets, Bangladesh sells mainly to the food service segment, which does generally not have very stringent quality and sustainability requirements but is extremely price-driven—incentivising buyers and suppliers to drive the price to the bottom, harming the perception of the quality and reliability of Bangladeshi shrimp in the international market.

One reason for the supply shortage is the growth of the domestic market. Official production numbers suggest that shrimp production in Bangladesh is relatively stable at around 135,000 MT, of which 70,000 MT is black tiger shrimp, 55,000 MT is freshwater prawn, and around 10,000 MT is wild-caught shrimp. Although these figures are most likely considerably inflated, these numbers confirm a considerable domestic shrimp market. According to industry sources, the domestic market may currently absorb around 50% of black tiger production. This would be around 35,000 MT, which was previously primarily exported. 35,000 MT of harvested shrimp equals around 20,000-25,000 MT of finished product, meaning that with an export volume of just 17,500 MT, the domestic market’s actual consumption of black tiger shrimp may be more than 50% and could even have reached 60-70%.

Due to the lack of raw materials and low shrimp prices, processing plants go bankrupt, workers lose their jobs, and farmers aren’t paid as much as possible for the shrimp they harvest. With a lack of long-term vision from most of Bangladesh’s shrimp exporters, it’s a vicious cycle that is hard to break. However, a few companies are trying to change the tide. In this blog, I discuss the efforts of three of these companies, and at the end, I will draw some conclusions about what may happen if they are successful.

I hope this blog will motivate buyers who thought negatively about Bangladesh but would like to source high-quality black tiger shrimp to change their minds and start buying again. Are you such a buyer? Contact me, and I will get you in touch.

Photo: Extensive shrimp farms near Khulna, Bangladesh. Credit: Lenk Group and ASC Foundation.