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Rebound sought for Ecuador shrimps

By SERGIO HELD in Cajica, Colombia | China Daily Global | Updated: 2020-07-22 10:29
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When Chinese customs officials found traces of the novel coronavirus on the packaging of frozen shrimps from Ecuador, it cast an unwanted spotlight on a key pillar of the country's economy.

But industry insiders express confidence that they can continue to rely on China to help offset the huge drops in sales to Europe and North America during the COVID-19 pandemic. Their optimism has also been boosted by upgrades to hygiene measures.

Maritza Rojo, an independent agricultural economist, said in an interview that "very strict sanitary regulations must be met" for exports of shrimps to China.

Jose Camposano, executive president of CNA, the national chamber for aquaculture businesses, known by its Spanish acronym, said the Ecuadorian shrimp sector is looking to provide quality assurance to customers around the world.

The industry is joining a global blockchain initiative that uses QR code technology to track food products from farm to table, no matter what the origin or final destination. The goal is to reassure consumers on safety and quality. No other shrimp industry in the world has joined the initiative yet, Camposano said.

"We are only weeks away from having customers being able to review the whole traceability of the product," he said. "They will be able to know from which farm it comes, at what working shift it was harvested, where it was packaged, and which routes it took before it arrived at the table."

The importance of the Chinese market to the South American country's shrimp industry cannot be overstated.

"China demands shrimps 12 months of the year. Unlike other countries, China demands more shellfish and more seafood," said Rojo, after the General Administration of Customs of China announced the findings on the tainted shipment on July 10.

In April and May, China purchased 82 percent and 73 percent of Ecuador's shrimp exports, respectively, according to data from the CNA, before the discovery of the packages carrying the virus that leads to COVID-19.

Camposano said the Chinese market has recovered, but the European market has collapsed.

Severe toll on industry

The pandemic took a severe toll on the industry, which relies on sales from hotels, restaurants and catering services for about half of all shrimp sales globally. These are all businesses that were shut down, or are shutting down again, in parts of Europe and the US.

Camposano said restaurants and hotels used to account for 50 percent of the demand for shrimps, but many did not survive the outbreak. Those that did are now turning to cheaper protein options like chicken, he said.

In 2019, shrimp exports from Ecuador totaled about 635,000 metric tons, worth $3.9 billion. The sector directly accounts for 4 percent of GDP and, indirectly, for about 12 percent. It generates between 200,000 and 300,000 direct jobs. Over the past seven years, the sector has grown by about 18 percent per year, according to the CNA.

But producers like Fernando Huerta, an independent shrimp operator with over 30 years' experience, are struggling now. They worry that global prices will plummet along with global demand.

"The situation is really complex. The challenge is to get to the break-even point," said Huerta, who is from Guayaquil, Ecuador's second-largest city,

Along with bananas and oil, shrimp production and sales form a key pillar of country's economy. With just 0.8 percent of total production going to domestic consumption, the sector is an important source of economic growth and US dollars, which the country uses domestically.

Ecuador is also looking to attract more investment in the industry.

"It is a sector open to explore financing alternatives, because those are large investments," said Camposano.

"With Ecuador being the second-largest shrimp producer and second-largest shrimp exporter, it has significant investments and an interesting performance, but still, there is much to do."

Late last year, Ecuador joined the Asian Infrastructure Investment Bank, becoming the first Latin American member of the Chinese-backed initiative. The country hopes its participation in the multilateral development bank will spur investment and help Ecuador enhance its competitiveness.

The writer is a freelance journalist for China Daily.

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