Ecuador’s shrimp industry has long been a vital pillar of its economy, cementing the country’s position as the world’s largest shrimp supplier. Yet, recent months have witnessed a sharp decline in exports, reflecting the broader challenges facing the global seafood sector.

In June 2024, Ecuador’s shrimp exports saw a significant drop, as export volumes fell to 180,000 tons, marking a 6% decline from the previous month. This downturn comes amid weakened purchasing power in major markets such as China and the United States, signaling difficult times ahead for Ecuador’s shrimp exporters.

US Market Weakens

The United States, historically a key market for Ecuadorian shrimp, has seen a steep reduction in demand. Shrimp exports to the US fell dramatically by 27.3% in value and 26.1% in volume compared to the same period in 2023. American consumers, hit by inflation and rising food prices, have shifted their purchasing habits, becoming more frugal with luxury goods like shrimp.

With US demand faltering, the ripple effect has been felt throughout Ecuador’s shrimp industry. Export value dropped to USD 524 million in June 2024, down 8.2% from the previous year’s figure of USD 571 million. Volume also dipped to 236 million pounds, a near 2% fall from June 2023 and a far cry from May 2024’s record 275 million pounds.

China’s Mixed Signals

In contrast, China—another crucial market for Ecuador—showed mixed results. While shrimp export volumes to China increased by 5.2% in June 2024, export values fell by 2.2% compared to the previous year.

The lower selling prices, driven by oversupply, saw the average price of shrimp fall to USD 2.21 per pound, a 6.8% decrease from 2023. Although export volume rose, profits for Ecuadorian shrimp exporters were noticeably squeezed.

A Global Economic Squeeze

The decline in Ecuador’s shrimp exports can largely be traced back to global economic instability. Inflation, a weakening global economy, and rising competition have led to reduced consumer spending on luxury foods such as shrimp. In markets like the US, where consumers are grappling with higher costs of living, this shift is particularly pronounced.

In addition, Ecuador faces growing competition from other shrimp-producing nations, notably India and Vietnam. These countries have ramped up production and offered competitive pricing, further putting pressure on Ecuadorian exports. Oversupply across the global shrimp market has led to price cuts, forcing Ecuadorian producers to lower prices to stay competitive.

A Prolonged Downturn

Industry experts predict that Ecuador’s shrimp exports will continue to face downward pressure for the remainder of 2024. Weak demand from key markets and an oversupplied global shrimp industry show little sign of reversing anytime soon.

Even as Ecuador maintains a dominant position in global shrimp exports, the road ahead looks tough.

Ecuador’s Shrimp Industry Responds

Ecuadorian shrimp companies are not standing still. To mitigate the impact of falling demand and prices, they are investing in advanced farming technologies to streamline production and lower costs. The focus on improving product quality is also key, as exporters look to distinguish Ecuadorian shrimp in an increasingly competitive market.

Moreover, Ecuador is eyeing new markets, such as Europe and the Middle East, where shrimp demand remains stable. By diversifying its export destinations, the industry hopes to alleviate its reliance on the US and China.

Flexible pricing policies are another strategy being employed to attract more buyers. Combined with better supply chain management, Ecuadorian businesses are well-positioned to weather the current storm, even if the road to recovery remains uncertain.