Business Report :
Export of shrimp has been halved in the last seven years created a threat in this industry in Bangladesh, sources disclosed.
Stakeholders said the shrimp industry is a major contributor to the country’s export basket as well the national economy.
In the recent years Bangladesh’s shrimp industry faces various challenges including a shortage of raw materials, declining global demand, environmental changes, financial mismanagement, and failure to adapt to changing market conditions, industry people said.
Insiders in the shrimp processing industry also said that the once-thriving shrimp processing industry is now facing an existential threat, with processing units shutting down as exports have halved in seven years.
In the last decade, around 25 shrimp processing factories have shut down, with closures accelerating after the early 2000s, said S Humayun Kabir, former vice-president of the BFFEA.
Cashing in on export subsidies and rising global demand, many shrimp processing units sprang up in the southwestern, southern and southeastern regions in the 1990s, backed by low-cost bank financing.
The industry boom lasted for around a decade, but as global demand for shrimp subsided and incentives fizzled out, production began to falter. Shrinking local supply and the emergence of a domestic prawn market further contributed to the decline.
Currently, out of 109 registered shrimp processing factories, only 30 in Khulna and 18 in Chattogram remain operational, according to the Bangladesh Frozen Foods Exporters Association (BFFEA).
The primary raw materials for shrimp processors are black tiger shrimp (Bagda) and freshwater shrimp (Golda).
According to the BFFEA, these factories have an annual production capacity of around 4 lakh tonnes but are receiving only 7 percent of their required shrimp input.
This supply shortage has led to declining production and factory closures, affecting the livelihoods of around 60 lakh people who directly or indirectly depend on the industry.
The high interest on bank loans is a major challenge for the shrimp processing and export industry. Currently, companies in this sector must take loans at 13-14 percent interest rates, much higher than what the rates were in the 90s.
As a result, export-oriented companies face higher interest rates, making it difficult for them to remain competitive in the global market.
Experts have identified several key factors disrupting local shrimp production. Those include rising temperatures, fluctuations in water salinity, decreasing depth of shrimp enclosures, poor-quality shrimp larvae, inadequate water supply and drainage, and declining soil and water fertility.
Climate change, declining shrimp fry availability, and financial mismanagement have left the industry in crisis.
Outdated farming methods have also hindered the industry’s ability to adapt.
Despite 50 to 60 years of shrimp cultivation, scientific advancements in farming techniques have been minimal. Farmers in Khulna, Satkhira, Bagerhat and Cox’s Bazar struggle with water shortages and increased disease outbreaks in shrimp enclosures.
Besides, shrimp farmers face difficulties accessing bank loans, as financial institutions rarely provide credit for shrimp farming. Consequently, many farmers rely on personal savings or high-interest private loans, further increasing their financial burden.
As a result, some farmers have quit shrimp farming altogether, while in certain areas, local movements have emerged against shrimp cultivation.
Factories including Sobi Sea Food Ltd, Star Sea Food Ltd, Jahanara, Modern, LFPCF, South Field, Cosmos, Shampa, Oriental, Bangladesh Sea Food, Asia Sea Food, Malek Hazi Sea Food, Unique ICE and Food Ltd, Apollo Sea Food Ltd, Shahnewaz Sea Food, and Beximco have ceased production.
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