Losses of shrimp growers and processors are piling up in the face of
sluggish global demand for black tiger bagda of Bangladesh amid ample
supply of the vannamei variety and weak currencies of major export
destinations against the dollar.
“We are going through a rough time,” said Atiar Rahman, a shrimp farmer from Rampal in the southwestern district of Bagerhat.
Rahman is one of the 8.33 lakh farmers who culture shrimp on 2.75
lakh hectares of land in the coastal regions and help the country earn
more than half a billion dollars in export receipts every year.
“Almost all of us are making losses for weak prices and mortality,”
said Rahman, who managed to recover only one-fifth of his investment
last year.
At the farmers' level, the price of shrimp has now fallen 30 percent to Tk 650 a kilogram from a year ago.
Exporters said the price of shrimp now hovers around $5.5 per pound (16-20 pieces) from above $6 per pound a year earlier.
In fiscal 2014-15, exporters sold black tiger shrimp at $4.07 each
pound, down from $5.85 the previous year, according to Bangladesh Frozen
Foods Exporters Association (BFFEA).
The downturn in shrimp shipments, which account for 90 percent of the
frozen and live fish category's export earnings, began in the second
quarter of last fiscal year, according to Export Promotion Bureau.
In fiscal 2014-15, 44,278 tonnes of shrimps were shipped, down 7.05
percent year-on-year. Exporters blamed the slide in shipments on the
Western customers' shift towards the lower priced vannamei, supplied in
ample quantity by India, Thailand and Vietnam; slow economic recovery in
the Eurozone; and the weakness of the euro and the Russian ruble.
Processors usually receive ample orders from foreign buyers between
the months of September and November, said Shoyeb Mahmud, general
manager of Jahanabad Seafood Ltd, a leading exporter of shrimp and
seafood.
“But the order flow this year has not been encouraging. We are waiting for good days to return,” he said.
Md Golam Mostafa, senior vice president of BFFEA, claimed processors
suffered up to 40 percent losses for falling prices of shrimp in the
international market. As a result, many exporters suffer from cash
crunch to buy shrimp from farmers, he said.
“We bought raw materials at higher prices earlier. But shrimp is a
perishable item and we cannot hold that for long. We have no option but
to sell processed shrimp to trim losses.”
Mostafa said low global demand and fund shortage at the exporters'
end also hurt farmers and others in the shrimp supply chain. Farmers
are forced to sell their produce in the domestic market to recoup part
of their investments, he said.
Mostafa urged the government to take steps so that banks transfer 40
percent of Tk 1,159 crore working capital loans of frozen food
processors to blocked account.
Last month, the fisheries and livestock ministry also recommended
that finance ministry take steps to transfer working capital loans of
frozen food exporters to blocked account for a period of 10 years.
The ministry also suggested increasing the rate of cash subsidy for
fish exports, along with a hike in prices of shrimp and fish at which
cash subsidy is determined.
