Shrimp exports continue to fall amid decreased global demand

Staff Reporter :
Bangladesh Frozen Foods Exporters Association has sought the support of the government for the shrimp sector to overcome the impacts of ongoing recession in Europe and America, and turn around their exports.
It also urged the government to increase cash incentives on frozen fish exports to 20 per cent from existing 10 per cent as the sector has been hit hard by continuous fall in export earnings.
Bangladesh Frozen Food Exporters Association (BFFEA) wrote a letter to the Prime Minister on March 20 this year, seeking enhancement of cash incentives as well as government support.
Currently, the frozen fish industry enjoys 10 per cent cash incentives on export of shrimp and 5.0 per cent on export of other fishes.
“Shrimp exports from Bangladesh continue to fall amid reduced global demands. The ongoing Russia-Ukraine war and high dollar rate also leave a negative impact on frozen fish and shrimp exports,” BFFEA President Kazi Belayet Hossain told The New Nation yesterday.
He added the demand for luxury food items, especially frozen shrimp and fish, decreased globally as the world’s leading economies, including the USA and the European nations, two key shrimps export markets of Bangladesh, slipped into recession due to the energy and inflation crises sparked by Russia’s invasion of Ukraine.
“Shrimp exports to the US and the EU are facing more challenges as both the economies are in recession. Consumers in these nations have stopped buying luxury products amid fall in their real income,” he noted.
He also said about 70 to 80 companies in this sectors have closed as the global demand for Bangladeshi shrimp and prawns continue to fall.
Export of shrimps endured a 24.39 per cent year-on-year drop in export value in July-March period of FY23, while frozen fish exports fall 29 per cent during this period.
Data from the Export Promotion Bureau (EPB) showed that the country earned $251.57 million from exports of shrimps between July and March in the ongoing fiscal year (2022-23), while it earned $332.72 million during the same period last fiscal year (2021-22).
The total yearly value for shrimp exports has been lodged in a downward trend since FY2014-15, when it was $568.03 million.
Kazi Belayet Hossain said that production of shrimps also fell significantly along with exports since 2014 as Bangladesh has long been producing low-yielding but high-priced ‘black tiger’ shrimp.
On the other hand, he said, “Our competitor countries like India, Vietnam, Thailand and some other countries, have been farming high-yielding Whiteleg shrimp (also called vannamei). These countries are far ahead of us in exporting the hybrid variety of shrimp”.
He further said Whiteleg shrimp have captured nearly 80 per cent of the global export market share, while prawns hold only 11 per cent.
“At present, one pound of prawn costs $2 higher than Whiteleg shrimp. Such a price variation has also caused fall in the demand for Bangladeshi shrimp and prawn in global market,” Belayet stated.
However, he said, the government has recently allowed the exporters to cultivate Whiteleg shrimp on a test basis for one year after 20 years of persuasion.
“The government framed the guideline for commercial cultivation of vannamei species after experimental farming in three farms in the southern coastal region showed several fold higher yields compared to that of locally farmed black tiger shrimp,” Kazi Belayet Hossain said.
Bangladesh yields 300-400 kilogrammes of black tiger shrimp and prawn in one hectare of land. In contrast, much larger quantities of Whiteleg shrimp can be obtained from the same area of land. “So, shrimp production and export will increase in the next year taking advantage of the government’s decision,” he hoped. At present, farmers are cultivating shrimp on 275,509 hectares of land across Bangladesh.
Bangladesh grows black tiger shrimp and prawns for export mainly in the southwest coastal division of Khulna and the rest in the southeast division of Chattogram.
In the letter to the Prime Minister, the BFFEA requested the government to completely abolish 10 per cent advance income tax on cash incentive, provided by the government for the export of frozen fish and shrimps, in the upcoming budget for the FY 2023-24.
It also urged the government to cut source tax on export of frozen shrimp and other fish to 0.25 per cent from the present 1 per cent.
The BFFEA also sought policy assistance for creating new export markets, bonded warehouse facilities and loan write-off provision for the sick frozen foods processing industries.
“We forwarded a set of recommendation in the letter to the Prime Minister aiming to increase export from the sector,” said BFFEA President Kazi Belayet Hossain.