Shrimp remains one of Indonesia’s main export commodities. However, in 2023, Indonesia’s performance as a shrimp exporter has dropped to fourth place, from previously being in the top three exporting countries.
What are the causes of Indonesia’s ranking to drop and what factors determine Indonesia’s position in the global shrimp export competition map? Find out more in this article.
Brief Overview of the Global Shrimp Industry
The image above shows the global shrimp industry condition in 2023. The top ranking is still held by Ecuador with a production of 912,211 tons, followed by India with 489,698 tons, and Vietnam with 157,852 tons. Indonesia ranks fourth with a production of 130,776 tons. This position represents a decline compared to the previous year.
Read more: The Potential of Vannamei Shrimp Market in Indonesia [2024]
Factors that Affect Indonesia’s Position
The global and Indonesian shrimp industry in 2023 was heavily affected by issues of dumping allegations and countervailing duties petition from the American Shrimp Processors Association (ASPA). ASPA accused Ecuador and Indonesia for ‘dumping’ frozen shrimp production to the USA, causing Indonesia’s shrimp to be subjected to an import duty of around 37.36%.
Meanwhile, the countervailing duties petition targeted several other exporting countries, including India and Vietnam. This petition claims that these countries provide countervailable subsidies for the production and export of frozen shrimp.
These issues affected the global and Indonesian shrimp industry, particularly because Indonesia exports 70% of its shrimp to the US market, causing shrimp prices to drop. Consequently, many farmers chose to temporarily stop producing shrimp.
Analysis of Drop in Ranking
1. Over-dependence on the US market
Indonesia's decline in ranking as a shrimp exporting country is influenced by its dependence on the US market. Indonesian shrimp export data from 2019 to the third quarter of 2023 shows that Indonesia exports most of its shrimp products to the US. Based on data from BKIPM (2022), 81.82% of packaged Indonesian shrimp products and 59.28% of processed shrimp products are exported to the US. Additionally, the volume of US shrimp consumption has also decreased. The US also imports shrimp from other exporting countries that offer lower prices.
2. Advantages of competitor countries
Furthermore, top-ranking countries like Ecuador and India also have several advantages in terms of shrimp production that strengthen their position, making Indonesia fall short of surpassing them in the rankings.
Ecuador currently implements lower stocking densities, which maintains the sustainability of their shrimp cultivation. Ecuador also reduces the cultivation time in each cycle by performing a nursery phase as an intermediary when the fry is transported from the hatchery to the grow-out phase, along with using automatic feeders which enables them to reach optimal feed efficiency.
Meanwhile, India, which previously experienced a shrimp production crisis, now has an advantage, as many of its farms are developing nursery facilities. This allows shrimp fry to grow in ponds with strict biosecurity before being transferred to grow-out ponds. India also has a stronger competitive advantage due to selling their products at a lower price.
Challenges Faced
1. Finding new export markets
The first challenge faced by Indonesia in order to reach a higher ranking in the global shrimp exporter map is finding new export markets. Based on the data presented above, Indonesia’s over-dependence on the US market makes its ranking more easily influenced by declining US shrimp import and consumption trends.
2. Increasing production
Indonesia's shrimp production also needs to be increased to improve its ranking in the export market. This increase also needs to be followed by strict quality control so that Indonesian shrimp products can compete globally.
Strategies to Improve Ranking
To address the challenges mentioned above, Indonesia can look to other countries that have the potential to become export destinations. This consideration needs to be based on export and import regulations, economic conditions, the types of products needed, and logistics fees.
However, efforts to open new export markets must be followed by improving product quality standards, especially in the post-harvest stage. Additionally, strong branding is necessary to compete with competitor countries.
At the farm level, increasing production must also be balanced with environmental control so that cultivation is not only productive and profitable but also sustainable. Regular data recording and monitoring can help farmers evaluate farming performance, predict potential disease occurrences, and make the best decisions for the next farming cycle.
Conclusion
Indonesia currently ranks fourth in the global shrimp exporter competition. Factors such as issues of dumping allegations and countervailing duty petitions, over-dependence on the US market, and the advantages of competitor countries hinder Indonesia from reaching a higher ranking. Therefore, it is important for all parties involved in the shrimp industry to work together to increase high-quality shrimp production while seeking potential new export markets.
Are you involved in the shrimp industry and want to learn more about the condition of the Indonesian shrimp industry to plan the best strategies for your farming or business? Find more information by downloading the Shrimp Outlook 2024 e-book and gain in-depth insights into the shrimp industry!
