For Honduran shrimp producers and processing plants, China is not a viable option for export. Despite favorable tariff exemptions announced by Honduran authorities, including the Ministry of Economic Development (SDE), industry stakeholders are citing significant pricing disparities as the primary deterrent.

Pricing Predicament

Buyers from China are offering a mere USD 4.00 per kilogram for Honduran shrimp, a rate deemed unfeasible by local aquaculture associations. This price, they argue, barely covers the average production cost, which stands at USD 1.80 per pound, leaving little room for profitability across the production and marketing chain.

The National Association of Aquaculture Farmers of Honduras (Andah) and the Association of Small and Medium Aquaculture Farmers of the South (Apemasur) assert that the ideal price point for the Chinese market should mirror Taiwan’s offering, which currently stands at USD 6.50 per kilogram.

Overall Expenses

The costs involved in getting shrimp from farm to plant are substantial. These include covering payroll and collateral, storage, fuel, and security, totaling USD 2.30 per pound. Additionally, financial costs ranging between 10% and 14% further impact the overall expenses.

The profit margin for producers averages between 24 and 25 lempiras (USD 0.97 to 1.01) per pound. Notably, smaller producers like Javier Rodríguez in Valle report lower production costs, ranging between 30 and 35 lempiras (USD 1.22 to 1.42) per pound, owing to more intensive farming techniques.

Tariffs vs. Pricing: The Real Barrier

Contrary to assumptions, it is not tariffs but pricing that poses the greatest obstacle to exporting to China. Even with tariff exemptions, profit margins remain unattractive for Honduran producers, estimated at just three lempiras (USD 0.12) per pound.

The backdrop of this debate is the recent geopolitical shift in Honduras’s trade relations. Following the severance of diplomatic ties with Taiwan, previously the primary market for Honduran aquaculture, China has emerged as a new focal point. However, the practical challenges of pricing have significantly tempered optimism about this transition.